Correlation Between Barloworld and Ucommune International
Can any of the company-specific risk be diversified away by investing in both Barloworld 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 Barloworld and Ucommune International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Barloworld Ltd ADR and Ucommune International, you can compare the effects of market volatilities on Barloworld 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 Barloworld with a short position of Ucommune International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Barloworld and Ucommune International.
Diversification Opportunities for Barloworld and Ucommune International
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Barloworld and Ucommune is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Barloworld Ltd ADR and Ucommune International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucommune International and Barloworld 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 Barloworld Ltd ADR 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 Barloworld i.e., Barloworld and Ucommune International go up and down completely randomly.
Pair Corralation between Barloworld and Ucommune International
Assuming the 90 days horizon Barloworld is expected to generate 36.12 times less return on investment than Ucommune International. But when comparing it to its historical volatility, Barloworld Ltd ADR is 10.97 times less risky than Ucommune International. It trades about 0.03 of its potential returns per unit of risk. Ucommune International is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 2.87 in Ucommune International on August 27, 2024 and sell it today you would lose (1.87) from holding Ucommune International or give up 65.16% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 86.8% |
| Values | Daily Returns |
Barloworld Ltd ADR vs. Ucommune International
Performance |
| Timeline |
| Barloworld ADR |
| Ucommune International |
Barloworld and Ucommune International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Barloworld and Ucommune International
The main advantage of trading using opposite Barloworld and Ucommune International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Barloworld 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.| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
| Ucommune International vs. Plexus Corp | Ucommune International vs. Jabil Circuit | Ucommune International vs. Sanmina | Ucommune International vs. Methode Electronics |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
Other Complementary Tools
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |