Correlation Between Visa and Ucommune International
Can any of the company-specific risk be diversified away by investing in both Visa 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 Visa and Ucommune International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Visa Class A and Ucommune International, you can compare the effects of market volatilities on Visa 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 Visa with a short position of Ucommune International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Visa and Ucommune International.
Diversification Opportunities for Visa and Ucommune International
-0.43 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Visa and Ucommune is -0.43. Overlapping area represents the amount of risk that can be diversified away by holding Visa Class A and Ucommune International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucommune International and Visa 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 Visa Class A 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 Visa i.e., Visa and Ucommune International go up and down completely randomly.
Pair Corralation between Visa and Ucommune International
Taking into account the 90-day investment horizon Visa is expected to generate 1.62 times less return on investment than Ucommune International. But when comparing it to its historical volatility, Visa Class A is 12.02 times less risky than Ucommune International. It trades about 0.49 of its potential returns per unit of risk. Ucommune International is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 0.95 in Ucommune International on November 2, 2024 and sell it today you would earn a total of 0.03 from holding Ucommune International or generate 3.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 84.21% |
| Values | Daily Returns |
Visa Class A vs. Ucommune International
Performance |
| Timeline |
| Visa Class A |
| Ucommune International |
Visa and Ucommune International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Visa and Ucommune International
The main advantage of trading using opposite Visa and Ucommune International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Visa 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.| Visa vs. American Express | Visa vs. PayPal Holdings | Visa vs. Capital One Financial | Visa vs. Upstart 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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