Correlation Between Ucommune International and Acadia Realty

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

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

Diversification Opportunities for Ucommune International and Acadia Realty

0.21

Correlation Coefficient

Ucommune International  Acadia Realty

Modest diversification

The 3 months correlation between Ucommune and Acadia is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Acadia Realty Trust in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Acadia Realty Trust and Ucommune International 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 Ucommune International are associated (or correlated) with Acadia Realty. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Acadia Realty Trust has no effect on the direction of Ucommune International i.e., Ucommune International and Acadia Realty go up and down completely randomly.

Pair Corralation between Ucommune International and Acadia Realty

Allowing for the 90-day total investment horizon Ucommune International is expected to under-perform the Acadia Realty. In addition to that, Ucommune International is 3.54 times more volatile than Acadia Realty Trust. It trades about -0.05 of its total potential returns per unit of risk. Acadia Realty Trust is currently generating about 0.09 per unit of volatility. If you would invest  1,690  in Acadia Realty Trust on October 24, 2024 and sell it today you would earn a total of  536.00  from holding Acadia Realty Trust or generate 31.72% return on investment over 90 days.

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

Ucommune International  vs.  Acadia Realty Trust

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 quite persistent forward-looking signals, Ucommune International is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Acadia Realty Trust

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Acadia Realty Trust has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest uncertain performance, the Stock's forward-looking signals remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Pair Trading with Ucommune International and Acadia Realty

The main advantage of trading using opposite Ucommune International and Acadia Realty positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ucommune International position performs unexpectedly, Acadia Realty 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 Acadia Realty will offset losses from the drop in Acadia Realty's long position.

The idea behind Ucommune International and Acadia Realty Trust 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.