Correlation Between Uxin and Cango

Can any of the company-specific risk be diversified away by investing in both Uxin and Cango 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 Uxin and Cango into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Uxin and Cango Inc, you can compare the effects of market volatilities on Uxin and Cango 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 Uxin with a short position of Cango. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uxin and Cango.

Diversification Opportunities for Uxin and Cango

0.53

Correlation Coefficient

Uxin  Cango

Very weak diversification

The 3 months correlation between Uxin and Cango is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Uxin and Cango Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cango Inc and Uxin 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 Uxin are associated (or correlated) with Cango. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cango Inc has no effect on the direction of Uxin i.e., Uxin and Cango go up and down completely randomly.

Pair Corralation between Uxin and Cango

Given the investment horizon of 90 days Uxin is expected to generate 0.78 times more return on investment than Cango. However, Uxin is 1.29 times less risky than Cango. It trades about -0.02 of its potential returns per unit of risk. Cango Inc is currently generating about -0.02 per unit of risk. If you would invest  473.00  in Uxin on December 28, 2024 and sell it today you would lose (52.00) from holding Uxin or give up 10.99% of portfolio value over 90 days.

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

Uxin  vs.  Cango Inc

Uxin

Risk-Adjusted Performance

Very Weak

Over the last 90 days Uxin has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy forward indicators, Uxin is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Cango Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cango Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Pair Trading with Uxin and Cango

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

The idea behind Uxin and Cango Inc 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 Money Managers module to screen money managers from public funds and ETFs managed around the world.