Correlation Between Ucommune International and Equity Commonwealth

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

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

Diversification Opportunities for Ucommune International and Equity Commonwealth

-0.74

Correlation Coefficient

Ucommune International  Equity Commonwealth

Pay attention - limited upside

The 3 months correlation between Ucommune and Equity is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Equity Commonwealth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Equity Commonwealth and Ucommune International 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 Ucommune International are associated (or correlated) with Equity Commonwealth. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Equity Commonwealth has no effect on the direction of Ucommune International i.e., Ucommune International and Equity Commonwealth go up and down completely randomly.

Pair Corralation between Ucommune International and Equity Commonwealth

Allowing for the 90-day total investment horizon Ucommune International is expected to under-perform the Equity Commonwealth. In addition to that, Ucommune International is 22.34 times more volatile than Equity Commonwealth. It trades about -0.06 of its total potential returns per unit of risk. Equity Commonwealth is currently generating about 0.1 per unit of volatility. If you would invest  2,478  in Equity Commonwealth on September 12, 2024 and sell it today you would earn a total of  27.00  from holding Equity Commonwealth or generate 1.09% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	92.06%
Values	Daily Returns

Ucommune International  vs.  Equity Commonwealth

Ucommune International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ucommune International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Equity Commonwealth

Risk-Adjusted Performance

0 of 100

OK

Over the last 90 days Equity Commonwealth has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Equity Commonwealth is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Ucommune International and Equity Commonwealth

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

The idea behind Ucommune International and Equity Commonwealth 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.

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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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.