Correlation Between Jiuzi Holdings and U Power

Can any of the company-specific risk be diversified away by investing in both Jiuzi Holdings and U Power 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 Jiuzi Holdings and U Power into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jiuzi Holdings and U Power Limited, you can compare the effects of market volatilities on Jiuzi Holdings and U Power 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 Jiuzi Holdings with a short position of U Power. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jiuzi Holdings and U Power.

Diversification Opportunities for Jiuzi Holdings and U Power

-0.48

Correlation Coefficient

Jiuzi Holdings  U Power

Very good diversification

The 3 months correlation between Jiuzi and UCAR is -0.48. Overlapping area represents the amount of risk that can be diversified away by holding Jiuzi Holdings and U Power Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on U Power Limited and Jiuzi Holdings 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 Jiuzi Holdings are associated (or correlated) with U Power. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of U Power Limited has no effect on the direction of Jiuzi Holdings i.e., Jiuzi Holdings and U Power go up and down completely randomly.

Pair Corralation between Jiuzi Holdings and U Power

Given the investment horizon of 90 days Jiuzi Holdings is expected to under-perform the U Power. But the stock apears to be less risky and, when comparing its historical volatility, Jiuzi Holdings is 10.11 times less risky than U Power. The stock trades about -0.04 of its potential returns per unit of risk. The U Power Limited is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  0.00  in U Power Limited on January 31, 2024 and sell it today you would earn a total of  555.00  from holding U Power Limited or generate 9.223372036854776E16% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	52.43%
Values	Daily Returns

Jiuzi Holdings  vs.  U Power Limited

Jiuzi Holdings

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jiuzi Holdings are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Jiuzi Holdings may actually be approaching a critical reversion point that can send shares even higher in May 2024.

U Power Limited

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in U Power Limited are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Even with relatively weak basic indicators, U Power reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jiuzi Holdings and U Power

The main advantage of trading using opposite Jiuzi Holdings and U Power positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jiuzi Holdings position performs unexpectedly, U Power 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 U Power will offset losses from the drop in U Power's long position.

The idea behind Jiuzi Holdings and U Power Limited pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.