Correlation Between U Power and Companhia Paranaense
Can any of the company-specific risk be diversified away by investing in both U Power and Companhia Paranaense 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 Companhia Paranaense 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 Companhia Paranaense de, you can compare the effects of market volatilities on U Power and Companhia Paranaense 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 Companhia Paranaense. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Companhia Paranaense.
Diversification Opportunities for U Power and Companhia Paranaense
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UCAR and Companhia is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Companhia Paranaense de in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Companhia Paranaense 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 Companhia Paranaense. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Companhia Paranaense has no effect on the direction of U Power i.e., U Power and Companhia Paranaense go up and down completely randomly.
Pair Corralation between U Power and Companhia Paranaense
Given the investment horizon of 90 days U Power Limited is expected to under-perform the Companhia Paranaense. In addition to that, U Power is 6.25 times more volatile than Companhia Paranaense de. It trades about -0.35 of its total potential returns per unit of risk. Companhia Paranaense de is currently generating about 0.28 per unit of volatility. If you would invest 530.00 in Companhia Paranaense de on November 3, 2024 and sell it today you would earn a total of 58.00 from holding Companhia Paranaense de or generate 10.94% 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. Companhia Paranaense de
Performance |
| Timeline |
| U Power Limited |
| Companhia Paranaense |
U Power and Companhia Paranaense Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Companhia Paranaense
The main advantage of trading using opposite U Power and Companhia Paranaense positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Companhia Paranaense 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 Companhia Paranaense will offset losses from the drop in Companhia Paranaense's long position.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| Companhia Paranaense vs. FactSet Research Systems | Companhia Paranaense vs. Bowhead Specialty Holdings | Companhia Paranaense vs. Essent Group | Companhia Paranaense vs. Conifer Holdings, 975 |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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