Correlation Between U Power and Paysafe
Can any of the company-specific risk be diversified away by investing in both U Power and Paysafe 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 Paysafe 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 Paysafe, you can compare the effects of market volatilities on U Power and Paysafe 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 Paysafe. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Paysafe.
Diversification Opportunities for U Power and Paysafe
Weak diversification
The 3 months correlation between UCAR and Paysafe is 0.35. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Paysafe in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Paysafe 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 Paysafe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Paysafe has no effect on the direction of U Power i.e., U Power and Paysafe go up and down completely randomly.
Pair Corralation between U Power and Paysafe
Given the investment horizon of 90 days U Power Limited is expected to generate 15.53 times more return on investment than Paysafe. However, U Power is 15.53 times more volatile than Paysafe. It trades about 0.03 of its potential returns per unit of risk. Paysafe is currently generating about 0.07 per unit of risk. If you would invest 36,700 in U Power Limited on September 4, 2024 and sell it today you would lose (36,065) from holding U Power Limited or give up 98.27% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Power Limited vs. Paysafe
Performance |
| Timeline |
| U Power Limited |
| Paysafe |
U Power and Paysafe Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Paysafe
The main advantage of trading using opposite U Power and Paysafe positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Paysafe 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 Paysafe will offset losses from the drop in Paysafe's long position.| U Power vs. Sonic Automotive | U Power vs. Lithia Motors | U Power vs. AutoNation | U Power vs. Penske Automotive Group |
| Paysafe vs. Skillz Platform | Paysafe vs. SoFi Technologies | Paysafe vs. Clover Health Investments | Paysafe vs. Opendoor Technologies |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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