Correlation Between Landsea Homes and Ucommune International

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

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

Diversification Opportunities for Landsea Homes and Ucommune International

-0.14

Correlation Coefficient

Landsea Homes  Ucommune International

Good diversification

The 3 months correlation between Landsea and Ucommune is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Landsea Homes and Ucommune International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucommune International and Landsea Homes 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 Landsea Homes 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 Landsea Homes i.e., Landsea Homes and Ucommune International go up and down completely randomly.

Pair Corralation between Landsea Homes and Ucommune International

Assuming the 90 days horizon Landsea Homes is expected to generate 5.31 times less return on investment than Ucommune International. In addition to that, Landsea Homes is 1.25 times more volatile than Ucommune International. It trades about 0.01 of its total potential returns per unit of risk. Ucommune International is currently generating about 0.09 per unit of volatility. If you would invest  0.80  in Ucommune International on December 30, 2024 and sell it today you would earn a total of  0.21  from holding Ucommune International or generate 26.25% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	83.61%
Values	Daily Returns

Landsea Homes  vs.  Ucommune International

Landsea Homes

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Landsea Homes are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Landsea Homes may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Ucommune International

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ucommune International are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal primary indicators, Ucommune International showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Landsea Homes and Ucommune International

The main advantage of trading using opposite Landsea Homes and Ucommune International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Landsea Homes 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 Landsea Homes 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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.