Correlation Between Quantum and Ucommune International

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

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

Diversification Opportunities for Quantum and Ucommune International

-0.09

Correlation Coefficient

Quantum  Ucommune International

Good diversification

The 3 months correlation between Quantum and Ucommune is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding Quantum and Ucommune International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucommune International and Quantum 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 Quantum are associated (or correlated) with Ucommune International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ucommune International has no effect on the direction of Quantum i.e., Quantum and Ucommune International go up and down completely randomly.

Pair Corralation between Quantum and Ucommune International

Given the investment horizon of 90 days Quantum is expected to generate 2.4 times more return on investment than Ucommune International. However, Quantum is 2.4 times more volatile than Ucommune International. It trades about 0.18 of its potential returns per unit of risk. Ucommune International is currently generating about 0.05 per unit of risk. If you would invest  355.00  in Quantum on September 14, 2024 and sell it today you would earn a total of  1,362  from holding Quantum or generate 383.66% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	84.13%
Values	Daily Returns

Quantum  vs.  Ucommune International

Quantum

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Quantum are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very inconsistent fundamental indicators, Quantum displayed solid returns over the last few months and may actually be approaching a breakup point.

Ucommune International

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ucommune International are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain primary indicators, Ucommune International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Quantum and Ucommune International

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

The idea behind Quantum and Ucommune International 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.