Correlation Between Cango and Uxin

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

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

Diversification Opportunities for Cango and Uxin

0.53

Correlation Coefficient

Cango  Uxin

Very weak diversification

The 3 months correlation between Cango and Uxin is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Cango Inc and Uxin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uxin and Cango 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 Cango Inc are associated (or correlated) with Uxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uxin has no effect on the direction of Cango i.e., Cango and Uxin go up and down completely randomly.

Pair Corralation between Cango and Uxin

Given the investment horizon of 90 days Cango Inc is expected to under-perform the Uxin. In addition to that, Cango is 1.29 times more volatile than Uxin. It trades about -0.02 of its total potential returns per unit of risk. Uxin is currently generating about -0.02 per unit of volatility. If you would invest  473.00  in Uxin on December 28, 2024 and sell it today you would lose (52.00) from holding Uxin or give up 10.99% of portfolio value over 90 days.

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

Cango Inc  vs.  Uxin

Cango Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cango Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Uxin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uxin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Uxin is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Cango and Uxin

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

The idea behind Cango Inc and Uxin 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.