Correlation Between Ucommune International and Empire State

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

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

Diversification Opportunities for Ucommune International and Empire State

-0.32

Correlation Coefficient

Ucommune International  Empire State

Very good diversification

The 3 months correlation between Ucommune and Empire is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Empire State Realty in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Empire State Realty 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 Empire State. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Empire State Realty has no effect on the direction of Ucommune International i.e., Ucommune International and Empire State go up and down completely randomly.

Pair Corralation between Ucommune International and Empire State

Allowing for the 90-day total investment horizon Ucommune International is expected to under-perform the Empire State. In addition to that, Ucommune International is 1.45 times more volatile than Empire State Realty. It trades about -0.06 of its total potential returns per unit of risk. Empire State Realty is currently generating about 0.07 per unit of volatility. If you would invest  994.00  in Empire State Realty on September 12, 2024 and sell it today you would earn a total of  94.00  from holding Empire State Realty or generate 9.46% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	90.63%
Values	Daily Returns

Ucommune International  vs.  Empire State Realty

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 weak performance in the last few months, the Etf's forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Empire State Realty

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Empire State Realty are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Empire State may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Ucommune International and Empire State

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

The idea behind Ucommune International and Empire State Realty 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.

Check out your portfolio center.

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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.