Correlation Between U Power and Mediag3

Can any of the company-specific risk be diversified away by investing in both U Power and Mediag3 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 Mediag3 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 Mediag3, you can compare the effects of market volatilities on U Power and Mediag3 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 Mediag3. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Mediag3.

Diversification Opportunities for U Power and Mediag3

0.0

Correlation Coefficient

U Power  Mediag3

Pay attention - limited upside

The 3 months correlation between UCAR and Mediag3 is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Mediag3 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mediag3 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 Mediag3. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mediag3 has no effect on the direction of U Power i.e., U Power and Mediag3 go up and down completely randomly.

Pair Corralation between U Power and Mediag3

Given the investment horizon of 90 days U Power Limited is expected to generate 0.32 times more return on investment than Mediag3. However, U Power Limited is 3.11 times less risky than Mediag3. It trades about 0.01 of its potential returns per unit of risk. Mediag3 is currently generating about -0.13 per unit of risk. If you would invest  686.00  in U Power Limited on October 3, 2024 and sell it today you would lose (23.00) from holding U Power Limited or give up 3.35% of portfolio value over 90 days.

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

U Power Limited  vs.  Mediag3

U Power Limited

Risk-Adjusted Performance

0 of 100

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 relatively invariable basic indicators, U Power is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Mediag3

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Mediag3 has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Pair Trading with U Power and Mediag3

The main advantage of trading using opposite U Power and Mediag3 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Mediag3 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 Mediag3 will offset losses from the drop in Mediag3's long position.

The idea behind U Power Limited and Mediag3 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.