Correlation Between Ucommune International and Marcus Millichap

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

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

Diversification Opportunities for Ucommune International and Marcus Millichap

0.15

Correlation Coefficient

Ucommune International  Marcus Millichap

Average diversification

The 3 months correlation between Ucommune and Marcus is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Marcus Millichap in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marcus Millichap 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 Marcus Millichap. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marcus Millichap has no effect on the direction of Ucommune International i.e., Ucommune International and Marcus Millichap go up and down completely randomly.

Pair Corralation between Ucommune International and Marcus Millichap

Allowing for the 90-day total investment horizon Ucommune International is expected to generate 1.53 times more return on investment than Marcus Millichap. However, Ucommune International is 1.53 times more volatile than Marcus Millichap. It trades about 0.07 of its potential returns per unit of risk. Marcus Millichap is currently generating about -0.07 per unit of risk. If you would invest  123.00  in Ucommune International on October 27, 2024 and sell it today you would earn a total of  4.00  from holding Ucommune International or generate 3.25% return on investment over 90 days.

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

Ucommune International  vs.  Marcus Millichap

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

Marcus Millichap

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Marcus Millichap has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong primary indicators, Marcus Millichap is not utilizing all of its potentials. The recent stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Ucommune International and Marcus Millichap

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

The idea behind Ucommune International and Marcus Millichap 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.