Correlation Between Ulta Beauty and Uxin
Can any of the company-specific risk be diversified away by investing in both Ulta Beauty and Uxin 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 Ulta Beauty and Uxin into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ulta Beauty and Uxin, you can compare the effects of market volatilities on Ulta Beauty and Uxin 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 Ulta Beauty with a short position of Uxin. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ulta Beauty and Uxin.
Diversification Opportunities for Ulta Beauty and Uxin
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ulta and Uxin is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ulta Beauty and Uxin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uxin and Ulta Beauty 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 Ulta Beauty are associated (or correlated) with Uxin. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uxin has no effect on the direction of Ulta Beauty i.e., Ulta Beauty and Uxin go up and down completely randomly.
Pair Corralation between Ulta Beauty and Uxin
Given the investment horizon of 90 days Ulta Beauty is expected to generate 18.32 times less return on investment than Uxin. But when comparing it to its historical volatility, Ulta Beauty is 3.16 times less risky than Uxin. It trades about 0.01 of its potential returns per unit of risk. Uxin is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 423.00 in Uxin on August 31, 2024 and sell it today you would earn a total of 4.00 from holding Uxin or generate 0.95% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ulta Beauty vs. Uxin
Performance |
| Timeline |
| Ulta Beauty |
| Uxin |
Ulta Beauty and Uxin Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ulta Beauty and Uxin
The main advantage of trading using opposite Ulta Beauty and Uxin positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ulta Beauty position performs unexpectedly, Uxin 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 Uxin will offset losses from the drop in Uxin's long position.| Ulta Beauty vs. Target | Ulta Beauty vs. Lowes Companies | Ulta Beauty vs. Kohls Corp | Ulta Beauty vs. Walmart |
| Uxin vs. Kingsway Financial Services | Uxin vs. KAR Auction Services | Uxin vs. Cango Inc | Uxin 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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