Correlation Between Ucommune International and Hannon Armstrong

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

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

Diversification Opportunities for Ucommune International and Hannon Armstrong

-0.34

Correlation Coefficient

Ucommune International  Hannon Armstrong

Very good diversification

The 3 months correlation between Ucommune and Hannon is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Ucommune International and Hannon Armstrong Sustainable in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hannon Armstrong Sus 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 Hannon Armstrong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hannon Armstrong Sus has no effect on the direction of Ucommune International i.e., Ucommune International and Hannon Armstrong go up and down completely randomly.

Pair Corralation between Ucommune International and Hannon Armstrong

Allowing for the 90-day total investment horizon Ucommune International is expected to under-perform the Hannon Armstrong. In addition to that, Ucommune International is 1.28 times more volatile than Hannon Armstrong Sustainable. It trades about -0.08 of its total potential returns per unit of risk. Hannon Armstrong Sustainable is currently generating about -0.05 per unit of volatility. If you would invest  2,696  in Hannon Armstrong Sustainable on February 3, 2024 and sell it today you would lose (98.00) from holding Hannon Armstrong Sustainable or give up 3.64% of portfolio value over 90 days.

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

Ucommune International  vs.  Hannon Armstrong Sustainable

Ucommune International

Risk-Adjusted Performance

0 of 100

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

Hannon Armstrong Sus

Risk-Adjusted Performance

8 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hannon Armstrong Sustainable are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak basic indicators, Hannon Armstrong demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Ucommune International and Hannon Armstrong

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

The idea behind Ucommune International and Hannon Armstrong Sustainable 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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.