Correlation Between Chindata Group and Fiverr International

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

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

Diversification Opportunities for Chindata Group and Fiverr International

-0.46

Correlation Coefficient

Chindata Group  Fiverr International

Very good diversification

The 3 months correlation between Chindata and Fiverr is -0.46. Overlapping area represents the amount of risk that can be diversified away by holding Chindata Group Holdings and Fiverr International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fiverr International and Chindata 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 Chindata Group Holdings are associated (or correlated) with Fiverr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fiverr International has no effect on the direction of Chindata Group i.e., Chindata Group and Fiverr International go up and down completely randomly.

Pair Corralation between Chindata Group and Fiverr International

Allowing for the 90-day total investment horizon Chindata Group Holdings is expected to generate 0.76 times more return on investment than Fiverr International. However, Chindata Group Holdings is 1.31 times less risky than Fiverr International. It trades about 0.04 of its potential returns per unit of risk. Fiverr International is currently generating about -0.02 per unit of risk. If you would invest  624.00  in Chindata Group Holdings on January 19, 2024 and sell it today you would earn a total of  221.00  from holding Chindata Group Holdings or generate 35.42% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	83.43%
Values	Daily Returns

Chindata Group Holdings  vs.  Fiverr International

Chindata Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Chindata Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Chindata Group is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Fiverr International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Fiverr International has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in May 2024. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with Chindata Group and Fiverr International

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

The idea behind Chindata Group Holdings and Fiverr International 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.