Correlation Between MDJH Old and Ucommune International

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

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

Diversification Opportunities for MDJH Old and Ucommune International

0.03

Correlation Coefficient

MDJH Old  Ucommune International

Significant diversification

The 3 months correlation between MDJH and Ucommune is 0.03. Overlapping area represents the amount of risk that can be diversified away by holding MDJH Old and Ucommune International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucommune International and MDJH Old 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 MDJH Old 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 MDJH Old i.e., MDJH Old and Ucommune International go up and down completely randomly.

Pair Corralation between MDJH Old and Ucommune International

Given the investment horizon of 90 days MDJH Old is expected to generate 7.02 times more return on investment than Ucommune International. However, MDJH Old is 7.02 times more volatile than Ucommune International. It trades about 0.11 of its potential returns per unit of risk. Ucommune International is currently generating about 0.02 per unit of risk. If you would invest  20.00  in MDJH Old on December 29, 2024 and sell it today you would earn a total of  4.00  from holding MDJH Old or generate 20.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	39.34%
Values	Daily Returns

MDJH Old  vs.  Ucommune International

MDJH Old

Risk-Adjusted Performance

OK

Over the last 90 days MDJH Old has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly unfluctuating forward-looking indicators, MDJH Old demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Ucommune International

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Ucommune International are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. 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 MDJH Old and Ucommune International

The main advantage of trading using opposite MDJH Old and Ucommune International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MDJH Old 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 MDJH Old 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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.