Correlation Between U Power and Cango
Can any of the company-specific risk be diversified away by investing in both U Power 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 U Power and Cango 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 Cango Inc, you can compare the effects of market volatilities on U Power 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 U Power with a short position of Cango. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Cango.
Diversification Opportunities for U Power and Cango
Good diversification
The 3 months correlation between UCAR and Cango is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Cango Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cango Inc 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 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 U Power i.e., U Power and Cango go up and down completely randomly.
Pair Corralation between U Power and Cango
Given the investment horizon of 90 days U Power Limited is expected to generate 10.96 times more return on investment than Cango. However, U Power is 10.96 times more volatile than Cango Inc. It trades about 0.05 of its potential returns per unit of risk. Cango Inc is currently generating about 0.13 per unit of risk. 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 |
U Power Limited vs. Cango Inc
Performance |
| Timeline |
| U Power Limited |
| Cango Inc |
U Power and Cango Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Cango
The main advantage of trading using opposite U Power and Cango positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power 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.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| Cango vs. Cars Inc | Cango vs. KAR Auction Services | Cango vs. Rush Enterprises B | Cango vs. Rush Enterprises A |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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