Correlation Between Marcus Millichap and Ucommune International

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

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

Diversification Opportunities for Marcus Millichap and Ucommune International

0.12

Correlation Coefficient

Marcus Millichap  Ucommune International

Average diversification

The 3 months correlation between Marcus and Ucommune is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Marcus Millichap and Ucommune International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucommune International and Marcus Millichap 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 Marcus Millichap 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 Marcus Millichap i.e., Marcus Millichap and Ucommune International go up and down completely randomly.

Pair Corralation between Marcus Millichap and Ucommune International

Considering the 90-day investment horizon Marcus Millichap is expected to under-perform the Ucommune International. But the stock apears to be less risky and, when comparing its historical volatility, Marcus Millichap is 1.55 times less risky than Ucommune International. The stock trades about -0.05 of its potential returns per unit of risk. The Ucommune International is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  117.00  in Ucommune International on December 19, 2024 and sell it today you would lose (2.00) from holding Ucommune International or give up 1.71% of portfolio value over 90 days.

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

Marcus Millichap  vs.  Ucommune International

Marcus Millichap

Risk-Adjusted Performance

Very Weak

Over the last 90 days Marcus Millichap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Marcus Millichap is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Ucommune International

Risk-Adjusted Performance

Insignificant

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 Marcus Millichap and Ucommune International

The main advantage of trading using opposite Marcus Millichap and Ucommune International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marcus Millichap 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 Marcus Millichap 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.