Correlation Between U Power and Vertu Motors
Can any of the company-specific risk be diversified away by investing in both U Power and Vertu Motors 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 Vertu Motors 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 Vertu Motors Plc, you can compare the effects of market volatilities on U Power and Vertu Motors 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 Vertu Motors. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Vertu Motors.
Diversification Opportunities for U Power and Vertu Motors
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between UCAR and Vertu is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Vertu Motors Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertu Motors Plc 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 Vertu Motors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertu Motors Plc has no effect on the direction of U Power i.e., U Power and Vertu Motors go up and down completely randomly.
Pair Corralation between U Power and Vertu Motors
Given the investment horizon of 90 days U Power Limited is expected to generate 45.97 times more return on investment than Vertu Motors. However, U Power is 45.97 times more volatile than Vertu Motors Plc. It trades about 0.05 of its potential returns per unit of risk. Vertu Motors Plc is currently generating about 0.12 per unit of risk. If you would invest 3,900 in U Power Limited on September 3, 2024 and sell it today you would lose (3,265) from holding U Power Limited or give up 83.72% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 14.17% |
| Values | Daily Returns |
U Power Limited vs. Vertu Motors Plc
Performance |
| Timeline |
| U Power Limited |
| Vertu Motors Plc |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
U Power and Vertu Motors Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Vertu Motors
The main advantage of trading using opposite U Power and Vertu Motors positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Vertu Motors 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 Vertu Motors will offset losses from the drop in Vertu Motors' long position.| U Power vs. Kaixin Auto Holdings | U Power vs. Uxin | U Power vs. SunCar Technology Group | U Power vs. Carvana Co |
| Vertu Motors vs. AutoCanada | Vertu Motors vs. Consumer Automotive Finance | Vertu Motors vs. Kaixin Auto Holdings | Vertu Motors vs. Vroom 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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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