Correlation Between Fangdd Network and Ucommune International

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

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

Diversification Opportunities for Fangdd Network and Ucommune International

0.47

Correlation Coefficient

Fangdd Network  Ucommune International

Very weak diversification

The 3 months correlation between Fangdd and Ucommune is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Fangdd Network Group and Ucommune International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucommune International and Fangdd Network 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 Fangdd Network Group 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 Fangdd Network i.e., Fangdd Network and Ucommune International go up and down completely randomly.

Pair Corralation between Fangdd Network and Ucommune International

Considering the 90-day investment horizon Fangdd Network Group is expected to under-perform the Ucommune International. In addition to that, Fangdd Network is 1.65 times more volatile than Ucommune International. It trades about -0.22 of its total potential returns per unit of risk. Ucommune International is currently generating about 0.01 per unit of volatility. If you would invest  114.00  in Ucommune International on December 28, 2024 and sell it today you would lose (1.00) from holding Ucommune International or give up 0.88% of portfolio value over 90 days.

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

Fangdd Network Group  vs.  Ucommune International

Fangdd Network Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Fangdd Network Group 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 basic indicators remain very healthy which may send shares a bit higher in April 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Ucommune International

Risk-Adjusted Performance

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 current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Fangdd Network and Ucommune International

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

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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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.