Correlation Between U Power and Pinterest

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

Diversification Opportunities for U Power and Pinterest

0.34

Correlation Coefficient

U Power  Pinterest

Weak diversification

The 3 months correlation between UCAR and Pinterest is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of U Power i.e., U Power and Pinterest go up and down completely randomly.

Pair Corralation between U Power and Pinterest

Given the investment horizon of 90 days U Power Limited is expected to generate 1.77 times more return on investment than Pinterest. However, U Power is 1.77 times more volatile than Pinterest. It trades about 0.04 of its potential returns per unit of risk. Pinterest is currently generating about -0.01 per unit of risk. If you would invest  555.00  in U Power Limited on September 24, 2024 and sell it today you would earn a total of  83.00  from holding U Power Limited or generate 14.95% return on investment over 90 days.

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

U Power Limited  vs.  Pinterest

U Power Limited

Risk-Adjusted Performance

0 of 100

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 current stock price agitation, may contribute to short-term losses for the retail investors.

Pinterest

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with U Power and Pinterest

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

The idea behind U Power Limited and Pinterest 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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.