Correlation Between Ucommune International and Net Lease

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

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

Diversification Opportunities for Ucommune International and Net Lease

-0.32

Correlation Coefficient

Ucommune International  Net Lease

Very good diversification

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

Pair Corralation between Ucommune International and Net Lease

Allowing for the 90-day total investment horizon Ucommune International is expected to under-perform the Net Lease. In addition to that, Ucommune International is 1.89 times more volatile than Net Lease Office. It trades about -0.04 of its total potential returns per unit of risk. Net Lease Office is currently generating about 0.06 per unit of volatility. If you would invest  1,906  in Net Lease Office on October 24, 2024 and sell it today you would earn a total of  1,259  from holding Net Lease Office or generate 66.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	62.55%
Values	Daily Returns

Ucommune International  vs.  Net Lease Office

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.

Net Lease Office

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Net Lease Office are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Even with relatively abnormal basic indicators, Net Lease may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Ucommune International and Net Lease

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

The idea behind Ucommune International and Net Lease Office 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.