Correlation Between U Power and Thor Industries
Can any of the company-specific risk be diversified away by investing in both U Power and Thor Industries 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 Thor Industries 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 Thor Industries, you can compare the effects of market volatilities on U Power and Thor Industries 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 Thor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Thor Industries.
Diversification Opportunities for U Power and Thor Industries
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between UCAR and Thor is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Thor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Thor Industries 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 Thor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Thor Industries has no effect on the direction of U Power i.e., U Power and Thor Industries go up and down completely randomly.
Pair Corralation between U Power and Thor Industries
Given the investment horizon of 90 days U Power is expected to generate 3.71 times less return on investment than Thor Industries. In addition to that, U Power is 1.92 times more volatile than Thor Industries. It trades about 0.01 of its total potential returns per unit of risk. Thor Industries is currently generating about 0.07 per unit of volatility. If you would invest 10,700 in Thor Industries on August 28, 2024 and sell it today you would earn a total of 854.00 from holding Thor Industries or generate 7.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Power Limited vs. Thor Industries
Performance |
| Timeline |
| U Power Limited |
| Thor Industries |
U Power and Thor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Thor Industries
The main advantage of trading using opposite U Power and Thor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Thor Industries 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 Thor Industries will offset losses from the drop in Thor Industries' long position.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| Thor Industries vs. Nio Class A | Thor Industries vs. Lucid Group | Thor Industries vs. Tesla Inc | Thor Industries vs. Mullen Automotive |
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 Stocks Directory module to find actively traded stocks across global markets.
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