Correlation Between U Power and Coca Cola
Can any of the company-specific risk be diversified away by investing in both U Power and Coca Cola 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 Coca Cola 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 The Coca Cola, you can compare the effects of market volatilities on U Power and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Coca Cola.
Diversification Opportunities for U Power and Coca Cola
Excellent diversification
The 3 months correlation between UCAR and Coca is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and The Coca Cola in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola has no effect on the direction of U Power i.e., U Power and Coca Cola go up and down completely randomly.
Pair Corralation between U Power and Coca Cola
Given the investment horizon of 90 days U Power Limited is expected to under-perform the Coca Cola. In addition to that, U Power is 6.47 times more volatile than The Coca Cola. It trades about -0.02 of its total potential returns per unit of risk. The Coca Cola is currently generating about 0.09 per unit of volatility. If you would invest 6,155 in The Coca Cola on November 28, 2024 and sell it today you would earn a total of 994.00 from holding The Coca Cola or generate 16.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Power Limited vs. The Coca Cola
Performance |
| Timeline |
| U Power Limited |
| Coca Cola |
U Power and Coca Cola Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Coca Cola
The main advantage of trading using opposite U Power and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| Coca Cola vs. Vita Coco | Coca Cola vs. Keurig Dr Pepper | Coca Cola vs. PepsiCo | Coca Cola vs. Coca Cola Femsa SAB |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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