Correlation Between Ucommune International and Barloworld
Can any of the company-specific risk be diversified away by investing in both Ucommune International and Barloworld 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 Barloworld into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ucommune International and Barloworld Ltd ADR, you can compare the effects of market volatilities on Ucommune International and Barloworld 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 Barloworld. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ucommune International and Barloworld.
Diversification Opportunities for Ucommune International and Barloworld
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ucommune and Barloworld is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Barloworld Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Barloworld ADR 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 Barloworld. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Barloworld ADR has no effect on the direction of Ucommune International i.e., Ucommune International and Barloworld go up and down completely randomly.
Pair Corralation between Ucommune International and Barloworld
Assuming the 90 days horizon Ucommune International is expected to generate 10.97 times more return on investment than Barloworld. However, Ucommune International is 10.97 times more volatile than Barloworld Ltd ADR. It trades about 0.1 of its potential returns per unit of risk. Barloworld Ltd ADR is currently generating about 0.03 per unit of risk. If you would invest 2.87 in Ucommune International on August 24, 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 | 86.76% |
| Values | Daily Returns |
Ucommune International vs. Barloworld Ltd ADR
Performance |
| Timeline |
| Ucommune International |
| Barloworld ADR |
Ucommune International and Barloworld Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ucommune International and Barloworld
The main advantage of trading using opposite Ucommune International and Barloworld positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ucommune International position performs unexpectedly, Barloworld 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 Barloworld will offset losses from the drop in Barloworld's long position.| Ucommune International vs. Landsea Homes | Ucommune International vs. Lion Financial Group | Ucommune International vs. Aquagold International | Ucommune International vs. Morningstar Unconstrained Allocation |
| Barloworld vs. Hertz Global Holdings | Barloworld vs. United Rentals | Barloworld vs. Ryder System | Barloworld vs. Herc Holdings |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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