Correlation Between Target Hospitality and Ucommune International
Can any of the company-specific risk be diversified away by investing in both Target Hospitality 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 Target Hospitality and Ucommune International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Target Hospitality Corp and Ucommune International, you can compare the effects of market volatilities on Target Hospitality 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 Target Hospitality with a short position of Ucommune International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Target Hospitality and Ucommune International.
Diversification Opportunities for Target Hospitality and Ucommune International
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Target and Ucommune is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding Target Hospitality Corp and Ucommune International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucommune International and Target Hospitality 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 Target Hospitality Corp 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 Target Hospitality i.e., Target Hospitality and Ucommune International go up and down completely randomly.
Pair Corralation between Target Hospitality and Ucommune International
If you would invest 1.10 in Ucommune International on August 31, 2024 and sell it today you would lose (0.10) from holding Ucommune International or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 4.76% |
| Values | Daily Returns |
Target Hospitality Corp vs. Ucommune International
Performance |
| Timeline |
| Target Hospitality Corp |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Ucommune International |
Target Hospitality and Ucommune International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Target Hospitality and Ucommune International
The main advantage of trading using opposite Target Hospitality and Ucommune International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Target Hospitality 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 Target Hospitality Corp 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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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