Correlation Between Ucommune International and Omega Healthcare

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

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

Diversification Opportunities for Ucommune International and Omega Healthcare

-0.67

Correlation Coefficient

Ucommune International  Omega Healthcare

Excellent diversification

The 3 months correlation between Ucommune and Omega is -0.67. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Omega Healthcare Investors in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Omega Healthcare Inv 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 Omega Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Omega Healthcare Inv has no effect on the direction of Ucommune International i.e., Ucommune International and Omega Healthcare go up and down completely randomly.

Pair Corralation between Ucommune International and Omega Healthcare

Allowing for the 90-day total investment horizon Ucommune International is expected to under-perform the Omega Healthcare. In addition to that, Ucommune International is 4.43 times more volatile than Omega Healthcare Investors. It trades about -0.07 of its total potential returns per unit of risk. Omega Healthcare Investors is currently generating about 0.16 per unit of volatility. If you would invest  3,697  in Omega Healthcare Investors on August 15, 2024 and sell it today you would earn a total of  400.00  from holding Omega Healthcare Investors or generate 10.82% return on investment over 90 days.

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

Ucommune International  vs.  Omega Healthcare Investors

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 inconsistent performance in the last few months, the Etf's forward-looking signals remain quite persistent which may send shares a bit higher in December 2024. The latest mess may also be a sign of long-standing up-swing for the ETF venture institutional investors.

Omega Healthcare Inv

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Omega Healthcare Investors are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite fairly unsteady technical indicators, Omega Healthcare may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Pair Trading with Ucommune International and Omega Healthcare

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

The idea behind Ucommune International and Omega Healthcare Investors 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .