Correlation Between Ucommune International and Landsea Homes
Can any of the company-specific risk be diversified away by investing in both Ucommune International and Landsea Homes 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 Landsea Homes into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ucommune International and Landsea Homes, you can compare the effects of market volatilities on Ucommune International and Landsea Homes 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 Landsea Homes. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ucommune International and Landsea Homes.
Diversification Opportunities for Ucommune International and Landsea Homes
0.03 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Ucommune and Landsea is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Landsea Homes in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Landsea Homes 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 Landsea Homes. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Landsea Homes has no effect on the direction of Ucommune International i.e., Ucommune International and Landsea Homes go up and down completely randomly.
Pair Corralation between Ucommune International and Landsea Homes
Assuming the 90 days horizon Ucommune International is expected to under-perform the Landsea Homes. In addition to that, Ucommune International is 1.22 times more volatile than Landsea Homes. It trades about -0.05 of its total potential returns per unit of risk. Landsea Homes is currently generating about 0.01 per unit of volatility. If you would invest 24.00 in Landsea Homes on August 28, 2024 and sell it today you would lose (1.00) from holding Landsea Homes or give up 4.17% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Ucommune International vs. Landsea Homes
Performance |
| Timeline |
| Ucommune International |
| Landsea Homes |
Ucommune International and Landsea Homes Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ucommune International and Landsea Homes
The main advantage of trading using opposite Ucommune International and Landsea Homes positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ucommune International position performs unexpectedly, Landsea Homes 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 Landsea Homes will offset losses from the drop in Landsea Homes' long position.| 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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