Correlation Between U Power and PS International
Can any of the company-specific risk be diversified away by investing in both U Power and PS International 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 PS International 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 PS International Group, you can compare the effects of market volatilities on U Power and PS International 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 PS International. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and PS International.
Diversification Opportunities for U Power and PS International
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between UCAR and PSIG is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and PS International Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PS International 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 PS International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PS International has no effect on the direction of U Power i.e., U Power and PS International go up and down completely randomly.
Pair Corralation between U Power and PS International
Given the investment horizon of 90 days U Power Limited is expected to generate 1.12 times more return on investment than PS International. However, U Power is 1.12 times more volatile than PS International Group. It trades about -0.2 of its potential returns per unit of risk. PS International Group is currently generating about -0.27 per unit of risk. If you would invest 778.00 in U Power Limited on August 30, 2024 and sell it today you would lose (162.00) from holding U Power Limited or give up 20.82% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Power Limited vs. PS International Group
Performance |
| Timeline |
| U Power Limited |
| PS International |
U Power and PS International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and PS International
The main advantage of trading using opposite U Power and PS International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, PS International 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 PS International will offset losses from the drop in PS International's long position.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| PS International vs. Pinterest | PS International vs. PACCAR Inc | PS International vs. U Power Limited | PS International vs. Cars Inc |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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