Correlation Between Wizz Air and Cheche Group

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

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

Diversification Opportunities for Wizz Air and Cheche Group

-0.22

Correlation Coefficient

Wizz Air  Cheche Group

Very good diversification

The 3 months correlation between Wizz and Cheche is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Wizz Air Holdings 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 Wizz Air 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 Wizz Air Holdings 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 Wizz Air i.e., Wizz Air and Cheche Group go up and down completely randomly.

Pair Corralation between Wizz Air and Cheche Group

Assuming the 90 days horizon Wizz Air Holdings is expected to generate 0.59 times more return on investment than Cheche Group. However, Wizz Air Holdings is 1.7 times less risky than Cheche Group. It trades about 0.09 of its potential returns per unit of risk. Cheche Group Class is currently generating about 0.03 per unit of risk. If you would invest  1,840  in Wizz Air Holdings on February 8, 2025 and sell it today you would earn a total of  354.00  from holding Wizz Air Holdings or generate 19.24% return on investment over 90 days.

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

Wizz Air Holdings  vs.  Cheche Group Class

Wizz Air Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Wizz Air Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Wizz Air reported solid returns over the last few months and may actually be approaching a breakup point.

Cheche Group Class

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Cheche Group Class are ranked lower than 2 (%) 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 Wizz Air and Cheche Group

The main advantage of trading using opposite Wizz Air and Cheche Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Wizz Air 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 Wizz Air Holdings 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.