Correlation Between U Power and Wabash National
Can any of the company-specific risk be diversified away by investing in both U Power and Wabash National 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 Wabash National 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 Wabash National, you can compare the effects of market volatilities on U Power and Wabash National 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 Wabash National. Check out your portfolio center. Please also check ongoing floating volatility patterns of U Power and Wabash National.
Diversification Opportunities for U Power and Wabash National
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between UCAR and Wabash is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding U Power Limited and Wabash National in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wabash National 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 Wabash National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wabash National has no effect on the direction of U Power i.e., U Power and Wabash National go up and down completely randomly.
Pair Corralation between U Power and Wabash National
Given the investment horizon of 90 days U Power Limited is expected to generate 23.81 times more return on investment than Wabash National. However, U Power is 23.81 times more volatile than Wabash National. It trades about 0.03 of its potential returns per unit of risk. Wabash National is currently generating about -0.02 per unit of risk. If you would invest 69,700 in U Power Limited on September 2, 2024 and sell it today you would lose (69,068) from holding U Power Limited or give up 99.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
U Power Limited vs. Wabash National
Performance |
| Timeline |
| U Power Limited |
| Wabash National |
U Power and Wabash National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with U Power and Wabash National
The main advantage of trading using opposite U Power and Wabash National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if U Power position performs unexpectedly, Wabash National 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 Wabash National will offset losses from the drop in Wabash National's long position.| U Power vs. Advance Auto Parts | U Power vs. Tractor Supply | U Power vs. Genuine Parts Co | U Power vs. Five Below |
| Wabash National vs. Rev Group | Wabash National vs. Gencor Industries | Wabash National vs. Alamo Group | Wabash National vs. Columbus McKinnon |
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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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