Correlation Between Meta Platforms and Cheche Group

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

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

Diversification Opportunities for Meta Platforms and Cheche Group

-0.87

Correlation Coefficient

Meta Platforms  Cheche Group

Pay attention - limited upside

The 3 months correlation between Meta and Cheche is -0.87. Overlapping area represents the amount of risk that can be diversified away by holding Meta Platforms 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 Meta Platforms 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 Meta Platforms 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 Meta Platforms i.e., Meta Platforms and Cheche Group go up and down completely randomly.

Pair Corralation between Meta Platforms and Cheche Group

Given the investment horizon of 90 days Meta Platforms is expected to generate 1.26 times more return on investment than Cheche Group. However, Meta Platforms is 1.26 times more volatile than Cheche Group Class. It trades about 0.14 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.01 per unit of risk. If you would invest  71,922  in Meta Platforms on May 2, 2025 and sell it today you would earn a total of  5,422  from holding Meta Platforms or generate 7.54% return on investment over 90 days.

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

Meta Platforms  vs.  Cheche Group Class

Meta Platforms

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Meta Platforms are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting basic indicators, Meta Platforms sustained solid returns over the last few months and may actually be approaching a breakup point.

Cheche Group Class

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cheche Group Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady performance, the Stock's fundamental indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Meta Platforms and Cheche Group

The main advantage of trading using opposite Meta Platforms and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Meta Platforms 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 Meta Platforms 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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.