Correlation Between U Power and WK Kellogg
Can any of the company-specific risk be diversified away by investing in both U Power and WK Kellogg 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 WK Kellogg 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 WK Kellogg Co, you can compare the effects of market volatilities on U Power and WK Kellogg 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 WK Kellogg. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and WK Kellogg.
Diversification Opportunities for U Power and WK Kellogg
-0.33 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UCAR and KLG is -0.33. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and WK Kellogg Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WK Kellogg 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 WK Kellogg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WK Kellogg has no effect on the direction of U Power i.e., U Power and WK Kellogg go up and down completely randomly.
Pair Corralation between U Power and WK Kellogg
Given the investment horizon of 90 days U Power Limited is expected to under-perform the WK Kellogg. In addition to that, U Power is 4.48 times more volatile than WK Kellogg Co. It trades about -0.17 of its total potential returns per unit of risk. WK Kellogg Co is currently generating about -0.08 per unit of volatility. If you would invest 1,775 in WK Kellogg Co on October 30, 2024 and sell it today you would lose (77.00) from holding WK Kellogg Co or give up 4.34% 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. WK Kellogg Co
Performance |
| Timeline |
| U Power Limited |
| WK Kellogg |
U Power and WK Kellogg Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and WK Kellogg
The main advantage of trading using opposite U Power and WK Kellogg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, WK Kellogg 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 WK Kellogg will offset losses from the drop in WK Kellogg's long position.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| WK Kellogg vs. Primoris Services | WK Kellogg vs. Tesla Inc | WK Kellogg vs. Topbuild Corp | WK Kellogg vs. Iridium Communications |
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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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