Correlation Between Ucommune International and Douglas Emmett

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

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

Diversification Opportunities for Ucommune International and Douglas Emmett

0.29

Correlation Coefficient

Ucommune International  Douglas Emmett

Modest diversification

The 3 months correlation between Ucommune and Douglas is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Douglas Emmett in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Douglas Emmett 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 Douglas Emmett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Douglas Emmett has no effect on the direction of Ucommune International i.e., Ucommune International and Douglas Emmett go up and down completely randomly.

Pair Corralation between Ucommune International and Douglas Emmett

Allowing for the 90-day total investment horizon Ucommune International is expected to generate 1.48 times more return on investment than Douglas Emmett. However, Ucommune International is 1.48 times more volatile than Douglas Emmett. It trades about 0.0 of its potential returns per unit of risk. Douglas Emmett is currently generating about -0.11 per unit of risk. If you would invest  123.00  in Ucommune International on November 28, 2024 and sell it today you would lose (4.00) from holding Ucommune International or give up 3.25% of portfolio value over 90 days.

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

Ucommune International  vs.  Douglas Emmett

Ucommune International

Risk-Adjusted Performance

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 newest stock price mess, may contribute to short-term losses for the institutional investors.

Douglas Emmett

Risk-Adjusted Performance

Very Weak

Over the last 90 days Douglas Emmett has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain fairly strong which may send shares a bit higher in March 2025. The recent confusion may also be a sign of long-lasting up-swing for the firm traders.

Pair Trading with Ucommune International and Douglas Emmett

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

The idea behind Ucommune International and Douglas Emmett 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.