Correlation Between Chagee Holdings and Interface

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

By analyzing existing cross correlation between Chagee Holdings Limited and Interface, you can compare the effects of market volatilities on Chagee Holdings and Interface 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 Chagee Holdings with a short position of Interface. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chagee Holdings and Interface.

Diversification Opportunities for Chagee Holdings and Interface

-0.53

Correlation Coefficient

Chagee Holdings  Interface

Excellent diversification

The 3 months correlation between Chagee and Interface is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Chagee Holdings Limited and Interface in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interface and Chagee Holdings 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 Chagee Holdings Limited are associated (or correlated) with Interface. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interface has no effect on the direction of Chagee Holdings i.e., Chagee Holdings and Interface go up and down completely randomly.

Pair Corralation between Chagee Holdings and Interface

Considering the 90-day investment horizon Chagee Holdings Limited is expected to under-perform the Interface. In addition to that, Chagee Holdings is 2.51 times more volatile than Interface. It trades about -0.08 of its total potential returns per unit of risk. Interface is currently generating about 0.11 per unit of volatility. If you would invest  1,826  in Interface on April 23, 2025 and sell it today you would earn a total of  213.00  from holding Interface or generate 11.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

Chagee Holdings Limited  vs.  Interface

Chagee Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Chagee Holdings Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's technical indicators remain somewhat strong which may send shares a bit higher in August 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Interface

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Interface are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting essential indicators, Interface may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Chagee Holdings and Interface

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

The idea behind Chagee Holdings Limited and Interface 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.