Correlation Between U Power and Guess

Can any of the company-specific risk be diversified away by investing in both U Power and Guess 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 Guess 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 Guess Inc, you can compare the effects of market volatilities on U Power and Guess 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 Guess. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Guess.

Diversification Opportunities for U Power and Guess

0.68

Correlation Coefficient

U Power  Guess

Poor diversification

The 3 months correlation between UCAR and Guess is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Guess Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Guess Inc 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 Guess. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Guess Inc has no effect on the direction of U Power i.e., U Power and Guess go up and down completely randomly.

Pair Corralation between U Power and Guess

Given the investment horizon of 90 days U Power Limited is expected to under-perform the Guess. In addition to that, U Power is 1.75 times more volatile than Guess Inc. It trades about -0.13 of its total potential returns per unit of risk. Guess Inc is currently generating about -0.04 per unit of volatility. If you would invest  1,386  in Guess Inc on December 28, 2024 and sell it today you would lose (240.00) from holding Guess Inc or give up 17.32% of portfolio value over 90 days.

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

U Power Limited  vs.  Guess Inc

U Power Limited

Risk-Adjusted Performance

Very Weak

Over the last 90 days U Power Limited has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in April 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Guess Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Guess Inc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with U Power and Guess

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

The idea behind U Power Limited and Guess Inc 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .