Correlation Between Uxin and SunCar Technology

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

By analyzing existing cross correlation between Uxin and SunCar Technology Group, you can compare the effects of market volatilities on Uxin and SunCar Technology 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 SunCar Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uxin and SunCar Technology.

Diversification Opportunities for Uxin and SunCar Technology

0.23

Correlation Coefficient

Uxin  SunCar Technology

Modest diversification

The 3 months correlation between Uxin and SunCar is 0.23. Overlapping area represents the amount of risk that can be diversified away by holding Uxin and SunCar Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SunCar Technology 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 SunCar Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SunCar Technology has no effect on the direction of Uxin i.e., Uxin and SunCar Technology go up and down completely randomly.

Pair Corralation between Uxin and SunCar Technology

Given the investment horizon of 90 days Uxin is expected to generate 2.05 times more return on investment than SunCar Technology. However, Uxin is 2.05 times more volatile than SunCar Technology Group. It trades about 0.01 of its potential returns per unit of risk. SunCar Technology Group is currently generating about -0.08 per unit of risk. If you would invest  452.00  in Uxin on September 16, 2024 and sell it today you would lose (32.00) from holding Uxin or give up 7.08% of portfolio value over 90 days.

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

Uxin  vs.  SunCar Technology Group

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 unfluctuating forward indicators, Uxin displayed solid returns over the last few months and may actually be approaching a breakup point.

SunCar Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days SunCar Technology Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, SunCar Technology is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Uxin and SunCar Technology

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

The idea behind Uxin and SunCar Technology Group 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.