Correlation Between Ucommune International and Research Frontiers
Can any of the company-specific risk be diversified away by investing in both Ucommune International and Research Frontiers 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 Research Frontiers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ucommune International and Research Frontiers Incorporated, you can compare the effects of market volatilities on Ucommune International and Research Frontiers 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 Research Frontiers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ucommune International and Research Frontiers.
Diversification Opportunities for Ucommune International and Research Frontiers
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Ucommune and Research is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Research Frontiers Incorporate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Research Frontiers 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 Research Frontiers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Research Frontiers has no effect on the direction of Ucommune International i.e., Ucommune International and Research Frontiers go up and down completely randomly.
Pair Corralation between Ucommune International and Research Frontiers
Assuming the 90 days horizon Ucommune International is expected to generate 21.57 times more return on investment than Research Frontiers. However, Ucommune International is 21.57 times more volatile than Research Frontiers Incorporated. It trades about 0.11 of its potential returns per unit of risk. Research Frontiers Incorporated is currently generating about 0.01 per unit of risk. If you would invest 1.00 in Ucommune International on September 2, 2024 and sell it today you would earn a total of 0.00 from holding Ucommune International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 89.68% |
| Values | Daily Returns |
Ucommune International vs. Research Frontiers Incorporate
Performance |
| Timeline |
| Ucommune International |
| Research Frontiers |
Ucommune International and Research Frontiers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ucommune International and Research Frontiers
The main advantage of trading using opposite Ucommune International and Research Frontiers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ucommune International position performs unexpectedly, Research Frontiers 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 Research Frontiers will offset losses from the drop in Research Frontiers' long position.The idea behind Ucommune International and Research Frontiers Incorporated 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.| Research Frontiers vs. Knowles Cor | Research Frontiers vs. Ubiquiti Networks | Research Frontiers vs. AmpliTech Group | Research Frontiers vs. Viavi Solutions |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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