Correlation Between Kaixin Auto and Uxin

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

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

Diversification Opportunities for Kaixin Auto and Uxin

0.47

Correlation Coefficient

Kaixin Auto  Uxin

Very weak diversification

The 3 months correlation between Kaixin and Uxin is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Kaixin Auto Holdings and Uxin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uxin and Kaixin Auto 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 Kaixin Auto Holdings 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 Kaixin Auto i.e., Kaixin Auto and Uxin go up and down completely randomly.

Pair Corralation between Kaixin Auto and Uxin

Given the investment horizon of 90 days Kaixin Auto is expected to generate 1.76 times less return on investment than Uxin. In addition to that, Kaixin Auto is 1.93 times more volatile than Uxin. It trades about 0.05 of its total potential returns per unit of risk. Uxin is currently generating about 0.18 per unit of volatility. If you would invest  157.00  in Uxin on September 5, 2024 and sell it today you would earn a total of  354.00  from holding Uxin or generate 225.48% return on investment over 90 days.

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

Kaixin Auto Holdings  vs.  Uxin

Kaixin Auto Holdings

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Kaixin Auto Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Kaixin Auto displayed solid returns over the last few months and may actually be approaching a breakup point.

Uxin

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Uxin are ranked lower than 14 (%) 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.

Pair Trading with Kaixin Auto and Uxin

The main advantage of trading using opposite Kaixin Auto and Uxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Kaixin Auto 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 Kaixin Auto Holdings 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.