Correlation Between U Power and Inchcape Plc
Can any of the company-specific risk be diversified away by investing in both U Power and Inchcape Plc 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 Inchcape Plc 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 Inchcape plc, you can compare the effects of market volatilities on U Power and Inchcape Plc 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 Inchcape Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Inchcape Plc.
Diversification Opportunities for U Power and Inchcape Plc
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UCAR and Inchcape is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Inchcape plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inchcape plc 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 Inchcape Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inchcape plc has no effect on the direction of U Power i.e., U Power and Inchcape Plc go up and down completely randomly.
Pair Corralation between U Power and Inchcape Plc
If you would invest 926.00 in Inchcape plc on August 30, 2024 and sell it today you would earn a total of 0.00 from holding Inchcape plc or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Power Limited vs. Inchcape plc
Performance |
| Timeline |
| U Power Limited |
| Inchcape plc |
U Power and Inchcape Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Inchcape Plc
The main advantage of trading using opposite U Power and Inchcape Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Inchcape Plc 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 Inchcape Plc will offset losses from the drop in Inchcape Plc's long position.| 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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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