Correlation Between Tractor Supply and U Power
Can any of the company-specific risk be diversified away by investing in both Tractor Supply 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 Tractor Supply and U Power into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tractor Supply and U Power Limited, you can compare the effects of market volatilities on Tractor Supply 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 Tractor Supply with a short position of U Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tractor Supply and U Power.
Diversification Opportunities for Tractor Supply and U Power
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tractor and UCAR is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Tractor Supply 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 Tractor Supply 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 Tractor Supply 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 Tractor Supply i.e., Tractor Supply and U Power go up and down completely randomly.
Pair Corralation between Tractor Supply and U Power
Given the investment horizon of 90 days Tractor Supply is expected to generate 0.35 times more return on investment than U Power. However, Tractor Supply is 2.89 times less risky than U Power. It trades about 0.21 of its potential returns per unit of risk. U Power Limited is currently generating about -0.22 per unit of risk. If you would invest 26,447 in Tractor Supply on September 1, 2024 and sell it today you would earn a total of 1,920 from holding Tractor Supply or generate 7.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tractor Supply vs. U Power Limited
Performance |
| Timeline |
| Tractor Supply |
| U Power Limited |
Tractor Supply and U Power Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tractor Supply and U Power
The main advantage of trading using opposite Tractor Supply and U Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tractor Supply 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.| Tractor Supply vs. AutoZone | Tractor Supply vs. Advance Auto Parts | Tractor Supply vs. Genuine Parts Co | Tractor Supply vs. Five Below |
| U Power vs. Advance Auto Parts | U Power vs. Tractor Supply | U Power vs. Genuine Parts Co | U Power vs. Five Below |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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