Correlation Between FirstService Corp and Ucommune International

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

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

Diversification Opportunities for FirstService Corp and Ucommune International

-0.69

Correlation Coefficient

FirstService Corp  Ucommune International

Excellent diversification

The 3 months correlation between FirstService and Ucommune is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding FirstService Corp and Ucommune International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucommune International and FirstService Corp 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 FirstService Corp 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 FirstService Corp i.e., FirstService Corp and Ucommune International go up and down completely randomly.

Pair Corralation between FirstService Corp and Ucommune International

Considering the 90-day investment horizon FirstService Corp is expected to generate 0.51 times more return on investment than Ucommune International. However, FirstService Corp is 1.96 times less risky than Ucommune International. It trades about 0.12 of its potential returns per unit of risk. Ucommune International is currently generating about -0.07 per unit of risk. If you would invest  18,835  in FirstService Corp on September 5, 2024 and sell it today you would earn a total of  486.00  from holding FirstService Corp or generate 2.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.45%
Values	Daily Returns

FirstService Corp  vs.  Ucommune International

FirstService Corp

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in FirstService Corp are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, FirstService Corp may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 latest inconsistent performance, the Etf's forward-looking signals remain persistent and the latest mess on Wall Street may also be a sign of long-standing gains for the ETF venture institutional investors.

Pair Trading with FirstService Corp and Ucommune International

The main advantage of trading using opposite FirstService Corp and Ucommune International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FirstService Corp 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 FirstService Corp 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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.