Correlation Between U Power and ATHENE

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

Diversification Opportunities for U Power and ATHENE

-0.06

Correlation Coefficient

U Power  ATHENE

Good diversification

The 3 months correlation between UCAR and ATHENE is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and ATHENE HLDG LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATHENE HLDG LTD 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 ATHENE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATHENE HLDG LTD has no effect on the direction of U Power i.e., U Power and ATHENE go up and down completely randomly.

Pair Corralation between U Power and ATHENE

Given the investment horizon of 90 days U Power Limited is expected to generate 4.71 times more return on investment than ATHENE. However, U Power is 4.71 times more volatile than ATHENE HLDG LTD. It trades about 0.06 of its potential returns per unit of risk. ATHENE HLDG LTD is currently generating about -0.25 per unit of risk. If you would invest  714.00  in U Power Limited on October 10, 2024 and sell it today you would earn a total of  26.00  from holding U Power Limited or generate 3.64% 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.  ATHENE HLDG LTD

U Power Limited

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in U Power Limited are ranked lower than 5 (%) 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.

ATHENE HLDG LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ATHENE HLDG LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, ATHENE is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with U Power and ATHENE

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

The idea behind U Power Limited and ATHENE HLDG LTD 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.