Correlation Between U Power and Radcom
Can any of the company-specific risk be diversified away by investing in both U Power and Radcom 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 Radcom 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 Radcom, you can compare the effects of market volatilities on U Power and Radcom 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 Radcom. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Radcom.
Diversification Opportunities for U Power and Radcom
Good diversification
The 3 months correlation between UCAR and Radcom is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Radcom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Radcom 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 Radcom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Radcom has no effect on the direction of U Power i.e., U Power and Radcom go up and down completely randomly.
Pair Corralation between U Power and Radcom
Given the investment horizon of 90 days U Power Limited is expected to under-perform the Radcom. In addition to that, U Power is 1.22 times more volatile than Radcom. It trades about -0.2 of its total potential returns per unit of risk. Radcom is currently generating about 0.21 per unit of volatility. If you would invest 1,003 in Radcom on August 30, 2024 and sell it today you would earn a total of 182.00 from holding Radcom or generate 18.15% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Power Limited vs. Radcom
Performance |
| Timeline |
| U Power Limited |
| Radcom |
U Power and Radcom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Radcom
The main advantage of trading using opposite U Power and Radcom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Radcom 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 Radcom will offset losses from the drop in Radcom's long position.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| Radcom vs. Shenandoah Telecommunications Co | Radcom vs. Anterix | Radcom vs. SK Telecom Co | Radcom vs. Liberty Broadband Srs |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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