Correlation Between U Power and STOAU

Can any of the company-specific risk be diversified away by investing in both U Power and STOAU 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 STOAU 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 STOAU 3649 29 APR 31, you can compare the effects of market volatilities on U Power and STOAU 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 STOAU. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and STOAU.

Diversification Opportunities for U Power and STOAU

-0.12

Correlation Coefficient

U Power  STOAU

Good diversification

The 3 months correlation between UCAR and STOAU is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and STOAU 3649 29 APR 31 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on STOAU 3649 29 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 STOAU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of STOAU 3649 29 has no effect on the direction of U Power i.e., U Power and STOAU go up and down completely randomly.

Pair Corralation between U Power and STOAU

Given the investment horizon of 90 days U Power Limited is expected to under-perform the STOAU. In addition to that, U Power is 7.05 times more volatile than STOAU 3649 29 APR 31. It trades about -0.12 of its total potential returns per unit of risk. STOAU 3649 29 APR 31 is currently generating about -0.12 per unit of volatility. If you would invest  8,818  in STOAU 3649 29 APR 31 on December 24, 2024 and sell it today you would lose (392.00) from holding STOAU 3649 29 APR 31 or give up 4.45% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	49.18%
Values	Daily Returns

U Power Limited  vs.  STOAU 3649 29 APR 31

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.

STOAU 3649 29

Risk-Adjusted Performance

Very Weak

Over the last 90 days STOAU 3649 29 APR 31 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest unsteady 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 STOAU 3649 29 APR 31 investors.

Pair Trading with U Power and STOAU

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

The idea behind U Power Limited and STOAU 3649 29 APR 31 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.