Correlation Between 373334KR1 and U Power

Can any of the company-specific risk be diversified away by investing in both 373334KR1 and U Power 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 373334KR1 and U Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between SO 5125 15 MAY 52 and U Power Limited, you can compare the effects of market volatilities on 373334KR1 and U Power 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 373334KR1 with a short position of U Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of 373334KR1 and U Power.

Diversification Opportunities for 373334KR1 and U Power

-0.32

Correlation Coefficient

373334KR1  U Power

Very good diversification

The 3 months correlation between 373334KR1 and UCAR is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding SO 5125 15 MAY 52 and U Power Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Power Limited and 373334KR1 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 SO 5125 15 MAY 52 are associated (or correlated) with U Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Power Limited has no effect on the direction of 373334KR1 i.e., 373334KR1 and U Power go up and down completely randomly.

Pair Corralation between 373334KR1 and U Power

Assuming the 90 days trading horizon 373334KR1 is expected to generate 3.47 times less return on investment than U Power. But when comparing it to its historical volatility, SO 5125 15 MAY 52 is 3.87 times less risky than U Power. It trades about 0.11 of its potential returns per unit of risk. U Power Limited is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest  700.00  in U Power Limited on September 15, 2024 and sell it today you would earn a total of  44.00  from holding U Power Limited or generate 6.29% return on investment over 90 days.

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

SO 5125 15 MAY 52  vs.  U Power Limited

SO 5125 15

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SO 5125 15 MAY 52 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, 373334KR1 is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

U Power Limited

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in U Power Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, U Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with 373334KR1 and U Power

The main advantage of trading using opposite 373334KR1 and U Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 373334KR1 position performs unexpectedly, U Power 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 U Power will offset losses from the drop in U Power's long position.

The idea behind SO 5125 15 MAY 52 and U Power Limited 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.