Correlation Between Lendlease Global and Cheche Group

Can any of the company-specific risk be diversified away by investing in both Lendlease Global and Cheche Group at the same time? Although using a correlation coefficient on its own may not help to predict future stock returns, this module helps to understand the diversifiable risk of combining Lendlease Global and Cheche Group into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Lendlease Global Commercial and Cheche Group Class, you can compare the effects of market volatilities on Lendlease Global and Cheche Group and check how they will diversify away market risk if combined in the same portfolio for a given time horizon. You can also utilize pair trading strategies of matching a long position in Lendlease Global with a short position of Cheche Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lendlease Global and Cheche Group.

Diversification Opportunities for Lendlease Global and Cheche Group

0.65

Correlation Coefficient

Lendlease Global  Cheche Group

Poor diversification

The 3 months correlation between Lendlease and Cheche is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Lendlease Global Commercial and Cheche Group Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cheche Group Class and Lendlease Global is a relative statistical measure of the degree to which these equity instruments tend to move together. The correlation coefficient measures the extent to which returns on Lendlease Global Commercial are associated (or correlated) with Cheche Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cheche Group Class has no effect on the direction of Lendlease Global i.e., Lendlease Global and Cheche Group go up and down completely randomly.

Pair Corralation between Lendlease Global and Cheche Group

Assuming the 90 days horizon Lendlease Global is expected to generate 7.38 times less return on investment than Cheche Group. But when comparing it to its historical volatility, Lendlease Global Commercial is 19.05 times less risky than Cheche Group. It trades about 0.13 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest  86.00  in Cheche Group Class on December 21, 2024 and sell it today you would earn a total of  7.00  from holding Cheche Group Class or generate 8.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Lendlease Global Commercial  vs.  Cheche Group Class

Lendlease Global Com

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Lendlease Global Commercial are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable fundamental indicators, Lendlease Global is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

Cheche Group Class

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Cheche Group reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Lendlease Global and Cheche Group

The main advantage of trading using opposite Lendlease Global and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lendlease Global position performs unexpectedly, Cheche Group can make up some of the losses. Pair trading also minimizes risk from directional movements in the market. For example, if an entire industry or sector drops because of unexpected headlines, the short position in Cheche Group will offset losses from the drop in Cheche Group's long position.

The idea behind Lendlease Global Commercial and Cheche Group Class pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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Note that this page's information should be used as a complementary analysis to find the right mix of equity instruments to add to your existing portfolios or create a brand new portfolio. You can also try the Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.