Correlation Between Ucommune International and Rafael Holdings

Can any of the company-specific risk be diversified away by investing in both Ucommune International and Rafael 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 Rafael 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 Rafael Holdings Class, you can compare the effects of market volatilities on Ucommune International and Rafael 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 Rafael Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ucommune International and Rafael Holdings.

Diversification Opportunities for Ucommune International and Rafael Holdings

0.05

Correlation Coefficient

Ucommune International  Rafael Holdings

Significant diversification

The 3 months correlation between Ucommune and Rafael is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Rafael Holdings Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rafael Holdings Class 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 Rafael Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rafael Holdings Class has no effect on the direction of Ucommune International i.e., Ucommune International and Rafael Holdings go up and down completely randomly.

Pair Corralation between Ucommune International and Rafael Holdings

Allowing for the 90-day total investment horizon Ucommune International is expected to generate 3.88 times less return on investment than Rafael Holdings. But when comparing it to its historical volatility, Ucommune International is 1.15 times less risky than Rafael Holdings. It trades about 0.02 of its potential returns per unit of risk. Rafael Holdings Class is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  173.00  in Rafael Holdings Class on December 28, 2024 and sell it today you would earn a total of  24.00  from holding Rafael Holdings Class or generate 13.87% 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.  Rafael Holdings Class

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.

Rafael Holdings Class

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Rafael Holdings Class are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating technical and fundamental indicators, Rafael Holdings disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ucommune International and Rafael Holdings

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

The idea behind Ucommune International and Rafael Holdings Class 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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.