Correlation Between Uxin and Carvana

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

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

Diversification Opportunities for Uxin and Carvana

0.3

Correlation Coefficient

Uxin  Carvana

Weak diversification

The 3 months correlation between Uxin and Carvana is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding Uxin and Carvana Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carvana and Uxin 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 Uxin are associated (or correlated) with Carvana. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carvana has no effect on the direction of Uxin i.e., Uxin and Carvana go up and down completely randomly.

Pair Corralation between Uxin and Carvana

Given the investment horizon of 90 days Uxin is expected to generate 4.84 times more return on investment than Carvana. However, Uxin is 4.84 times more volatile than Carvana Co. It trades about 0.16 of its potential returns per unit of risk. Carvana Co is currently generating about 0.24 per unit of risk. If you would invest  152.00  in Uxin on September 17, 2024 and sell it today you would earn a total of  268.00  from holding Uxin or generate 176.32% return on investment over 90 days.

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

Uxin  vs.  Carvana Co

Uxin

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Uxin are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of very uncertain forward indicators, Uxin displayed solid returns over the last few months and may actually be approaching a breakup point.

Carvana

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Carvana Co are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain basic indicators, Carvana sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Uxin and Carvana

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

The idea behind Uxin and Carvana Co 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.