Correlation Between ToughBuilt Industries and Ucommune International

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

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

Diversification Opportunities for ToughBuilt Industries and Ucommune International

0.0

Correlation Coefficient

ToughBuilt Industries  Ucommune International

Pay attention - limited upside

The 3 months correlation between ToughBuilt and Ucommune is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ToughBuilt Industries WT and Ucommune International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ucommune International and ToughBuilt Industries 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 ToughBuilt Industries WT 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 ToughBuilt Industries i.e., ToughBuilt Industries and Ucommune International go up and down completely randomly.

Pair Corralation between ToughBuilt Industries and Ucommune International

If you would invest  1.00  in Ucommune International on November 28, 2024 and sell it today you would earn a total of  0.00  from holding Ucommune International or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	0.0%
Values	Daily Returns

ToughBuilt Industries WT  vs.  Ucommune International

ToughBuilt Industries

Risk-Adjusted Performance

Very Weak

Over the last 90 days ToughBuilt Industries WT has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, ToughBuilt Industries is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Ucommune International

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Ucommune International are ranked lower than 3 (%) 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 ToughBuilt Industries and Ucommune International

The main advantage of trading using opposite ToughBuilt Industries and Ucommune International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ToughBuilt Industries 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 ToughBuilt Industries WT 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.