Correlation Between Ucommune International and Ke Holdings

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

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

Diversification Opportunities for Ucommune International and Ke Holdings

-0.45

Correlation Coefficient

Ucommune International  Ke Holdings

Very good diversification

The 3 months correlation between Ucommune and BEKE is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Ke Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ke Holdings 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 Ke Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ke Holdings has no effect on the direction of Ucommune International i.e., Ucommune International and Ke Holdings go up and down completely randomly.

Pair Corralation between Ucommune International and Ke Holdings

Allowing for the 90-day total investment horizon Ucommune International is expected to generate 4.25 times less return on investment than Ke Holdings. But when comparing it to its historical volatility, Ucommune International is 1.25 times less risky than Ke Holdings. It trades about 0.02 of its potential returns per unit of risk. Ke Holdings is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  1,843  in Ke Holdings on December 28, 2024 and sell it today you would earn a total of  276.00  from holding Ke Holdings or generate 14.98% return on investment over 90 days.

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

Ucommune International  vs.  Ke Holdings

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.

Ke Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Ke Holdings are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of rather inconsistent forward-looking signals, Ke Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ucommune International and Ke Holdings

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

The idea behind Ucommune International and Ke Holdings 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.