Correlation Between U Power and Cadence Design
Can any of the company-specific risk be diversified away by investing in both U Power and Cadence Design 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 Cadence Design 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 Cadence Design Systems, you can compare the effects of market volatilities on U Power and Cadence Design 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 Cadence Design. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Cadence Design.
Diversification Opportunities for U Power and Cadence Design
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between UCAR and Cadence is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Cadence Design Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cadence Design Systems 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 Cadence Design. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cadence Design Systems has no effect on the direction of U Power i.e., U Power and Cadence Design go up and down completely randomly.
Pair Corralation between U Power and Cadence Design
Given the investment horizon of 90 days U Power Limited is expected to under-perform the Cadence Design. In addition to that, U Power is 2.81 times more volatile than Cadence Design Systems. It trades about -0.22 of its total potential returns per unit of risk. Cadence Design Systems is currently generating about 0.3 per unit of volatility. If you would invest 27,612 in Cadence Design Systems on September 1, 2024 and sell it today you would earn a total of 3,069 from holding Cadence Design Systems or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Power Limited vs. Cadence Design Systems
Performance |
| Timeline |
| U Power Limited |
| Cadence Design Systems |
U Power and Cadence Design Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Cadence Design
The main advantage of trading using opposite U Power and Cadence Design positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Cadence Design 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 Cadence Design will offset losses from the drop in Cadence Design's long position.| U Power vs. Advance Auto Parts | U Power vs. Tractor Supply | U Power vs. Genuine Parts Co | U Power vs. Five Below |
| Cadence Design vs. Workday | Cadence Design vs. Salesforce | Cadence Design vs. Intuit Inc | Cadence Design vs. Snowflake |
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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals |