Correlation Between Ucommune International and Fabrinet
Can any of the company-specific risk be diversified away by investing in both Ucommune International and Fabrinet 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 Fabrinet into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ucommune International and Fabrinet, you can compare the effects of market volatilities on Ucommune International and Fabrinet 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 Fabrinet. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ucommune International and Fabrinet.
Diversification Opportunities for Ucommune International and Fabrinet
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Ucommune and Fabrinet is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Fabrinet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fabrinet 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 Fabrinet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fabrinet has no effect on the direction of Ucommune International i.e., Ucommune International and Fabrinet go up and down completely randomly.
Pair Corralation between Ucommune International and Fabrinet
Assuming the 90 days horizon Ucommune International is expected to under-perform the Fabrinet. In addition to that, Ucommune International is 1.29 times more volatile than Fabrinet. It trades about -0.2 of its total potential returns per unit of risk. Fabrinet is currently generating about 0.09 per unit of volatility. If you would invest 20,203 in Fabrinet on November 28, 2024 and sell it today you would earn a total of 1,329 from holding Fabrinet or generate 6.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 81.82% |
| Values | Daily Returns |
Ucommune International vs. Fabrinet
Performance |
| Timeline |
| Ucommune International |
| Fabrinet |
Ucommune International and Fabrinet Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ucommune International and Fabrinet
The main advantage of trading using opposite Ucommune International and Fabrinet positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ucommune International position performs unexpectedly, Fabrinet 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 Fabrinet will offset losses from the drop in Fabrinet's long position.The idea behind Ucommune International and Fabrinet 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 Global Correlations module to find global opportunities by holding instruments from different markets.
Other Complementary Tools
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites |