Correlation Between Cheche Group and SmartSet Automation

Can any of the company-specific risk be diversified away by investing in both Cheche Group and SmartSet Automation 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 Cheche Group and SmartSet Automation into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Cheche Group Class and SmartSet Automation LLC, you can compare the effects of market volatilities on Cheche Group and SmartSet Automation 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 Cheche Group with a short position of SmartSet Automation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cheche Group and SmartSet Automation.

Diversification Opportunities for Cheche Group and SmartSet Automation

0.2

Correlation Coefficient

Cheche Group  SmartSet Automation

Modest diversification

The 3 months correlation between Cheche and SmartSet is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Cheche Group Class and SmartSet Automation LLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SmartSet Automation LLC and Cheche Group 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 Cheche Group Class are associated (or correlated) with SmartSet Automation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SmartSet Automation LLC has no effect on the direction of Cheche Group i.e., Cheche Group and SmartSet Automation go up and down completely randomly.

Pair Corralation between Cheche Group and SmartSet Automation

Considering the 90-day investment horizon Cheche Group Class is expected to under-perform the SmartSet Automation. But the stock apears to be less risky and, when comparing its historical volatility, Cheche Group Class is 7.3 times less risky than SmartSet Automation. The stock trades about -0.03 of its potential returns per unit of risk. The SmartSet Automation LLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  0.15  in SmartSet Automation LLC on May 15, 2025 and sell it today you would earn a total of  0.02  from holding SmartSet Automation LLC or generate 13.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	98.39%
Values	Daily Returns

Cheche Group Class  vs.  SmartSet Automation LLC

Cheche Group Class

Risk-Adjusted Performance

Weakest

Over the last 90 days Cheche Group Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental indicators, Cheche Group is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

SmartSet Automation LLC

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in SmartSet Automation LLC are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, SmartSet Automation exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cheche Group and SmartSet Automation

The main advantage of trading using opposite Cheche Group and SmartSet Automation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cheche Group position performs unexpectedly, SmartSet Automation 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 SmartSet Automation will offset losses from the drop in SmartSet Automation's long position.

The idea behind Cheche Group Class and SmartSet Automation LLC 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.