Correlation Between U Power and 62954WAC9

Can any of the company-specific risk be diversified away by investing in both U Power and 62954WAC9 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 62954WAC9 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 NTT 1162 03 APR 26, you can compare the effects of market volatilities on U Power and 62954WAC9 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 62954WAC9. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and 62954WAC9.

Diversification Opportunities for U Power and 62954WAC9

-0.21

Correlation Coefficient

U Power  62954WAC9

Very good diversification

The 3 months correlation between UCAR and 62954WAC9 is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and NTT 1162 03 APR 26 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NTT 1162 03 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 62954WAC9. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NTT 1162 03 has no effect on the direction of U Power i.e., U Power and 62954WAC9 go up and down completely randomly.

Pair Corralation between U Power and 62954WAC9

Given the investment horizon of 90 days U Power Limited is expected to generate 4.88 times more return on investment than 62954WAC9. However, U Power is 4.88 times more volatile than NTT 1162 03 APR 26. It trades about 0.09 of its potential returns per unit of risk. NTT 1162 03 APR 26 is currently generating about -0.13 per unit of risk. If you would invest  619.00  in U Power Limited on September 15, 2024 and sell it today you would earn a total of  125.00  from holding U Power Limited or generate 20.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	82.81%
Values	Daily Returns

U Power Limited  vs.  NTT 1162 03 APR 26

U Power Limited

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in U Power Limited are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating basic indicators, U Power reported solid returns over the last few months and may actually be approaching a breakup point.

NTT 1162 03

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days NTT 1162 03 APR 26 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for NTT 1162 03 APR 26 investors.

Pair Trading with U Power and 62954WAC9

The main advantage of trading using opposite U Power and 62954WAC9 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, 62954WAC9 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 62954WAC9 will offset losses from the drop in 62954WAC9's long position.

The idea behind U Power Limited and NTT 1162 03 APR 26 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.