Correlation Between Ke Holdings and Ucommune International

Can any of the company-specific risk be diversified away by investing in both Ke Holdings 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 Ke Holdings and Ucommune International into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Ke Holdings and Ucommune International, you can compare the effects of market volatilities on Ke Holdings 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 Ke Holdings with a short position of Ucommune International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ke Holdings and Ucommune International.

Diversification Opportunities for Ke Holdings and Ucommune International

0.51

Correlation Coefficient

Ke Holdings  Ucommune International

Very weak diversification

The 3 months correlation between BEKE and Ucommune is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Ke Holdings and Ucommune International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucommune International and Ke Holdings 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 Ke Holdings 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 Ke Holdings i.e., Ke Holdings and Ucommune International go up and down completely randomly.

Pair Corralation between Ke Holdings and Ucommune International

Given the investment horizon of 90 days Ke Holdings is expected to under-perform the Ucommune International. But the stock apears to be less risky and, when comparing its historical volatility, Ke Holdings is 1.05 times less risky than Ucommune International. The stock trades about -0.1 of its potential returns per unit of risk. The Ucommune International is currently generating about 0.0 of returns per unit of risk over similar time horizon. If you would invest  122.00  in Ucommune International on October 10, 2024 and sell it today you would lose (4.00) from holding Ucommune International or give up 3.28% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Ke Holdings  vs.  Ucommune International

Ke Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ke Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's forward-looking signals remain rather sound which may send shares a bit higher in February 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Ucommune International

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Ucommune International has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Ucommune International is not utilizing all of its potentials. The newest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Ke Holdings and Ucommune International

The main advantage of trading using opposite Ke Holdings and Ucommune International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ke Holdings 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.

The idea behind Ke Holdings and Ucommune International 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.