Correlation Between Cango and U Power
Can any of the company-specific risk be diversified away by investing in both Cango and U Power 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 Cango and U Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Cango Inc and U Power Limited, you can compare the effects of market volatilities on Cango and U Power 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 Cango with a short position of U Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cango and U Power.
Diversification Opportunities for Cango and U Power
Good diversification
The 3 months correlation between Cango and UCAR is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Cango Inc and U Power Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Power Limited and Cango 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 Cango Inc are associated (or correlated) with U Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Power Limited has no effect on the direction of Cango i.e., Cango and U Power go up and down completely randomly.
Pair Corralation between Cango and U Power
Given the investment horizon of 90 days Cango is expected to generate 4.21 times less return on investment than U Power. But when comparing it to its historical volatility, Cango Inc is 10.96 times less risky than U Power. It trades about 0.13 of its potential returns per unit of risk. U Power Limited is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 1,259 in U Power Limited on November 9, 2024 and sell it today you would lose (967.00) from holding U Power Limited or give up 76.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Cango Inc vs. U Power Limited
Performance |
| Timeline |
| Cango Inc |
| U Power Limited |
Cango and U Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Cango and U Power
The main advantage of trading using opposite Cango and U Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cango position performs unexpectedly, U Power 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 U Power will offset losses from the drop in U Power's long position.| Cango vs. Cars Inc | Cango vs. KAR Auction Services | Cango vs. Rush Enterprises B | Cango vs. Rush Enterprises A |
| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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