Correlation Between U Power and Cirmaker Technology

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

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

Diversification Opportunities for U Power and Cirmaker Technology

-0.1

Correlation Coefficient

U Power  Cirmaker Technology

Good diversification

The 3 months correlation between UCAR and Cirmaker is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Cirmaker Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cirmaker Technology and U Power 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 U Power Limited are associated (or correlated) with Cirmaker Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cirmaker Technology has no effect on the direction of U Power i.e., U Power and Cirmaker Technology go up and down completely randomly.

Pair Corralation between U Power and Cirmaker Technology

Given the investment horizon of 90 days U Power is expected to generate 1.04 times less return on investment than Cirmaker Technology. In addition to that, U Power is 1.01 times more volatile than Cirmaker Technology. It trades about 0.06 of its total potential returns per unit of risk. Cirmaker Technology is currently generating about 0.06 per unit of volatility. If you would invest  0.01  in Cirmaker Technology on October 9, 2024 and sell it today you would earn a total of  5.39  from holding Cirmaker Technology or generate 53900.0% return on investment over 90 days.

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

U Power Limited  vs.  Cirmaker Technology

U Power Limited

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in U Power Limited are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, U Power reported solid returns over the last few months and may actually be approaching a breakup point.

Cirmaker Technology

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Cirmaker Technology has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable forward-looking signals, Cirmaker Technology is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with U Power and Cirmaker Technology

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

The idea behind U Power Limited and Cirmaker Technology 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.

Check out your portfolio center.

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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.