Correlation Between Uber Technologies and CVR Energy
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and CVR Energy 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 Uber Technologies and CVR Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and CVR Energy, you can compare the effects of market volatilities on Uber Technologies and CVR Energy 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 Uber Technologies with a short position of CVR Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and CVR Energy.
Diversification Opportunities for Uber Technologies and CVR Energy
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Uber and CVR is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and CVR Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CVR Energy and Uber Technologies 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 Uber Technologies are associated (or correlated) with CVR Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CVR Energy has no effect on the direction of Uber Technologies i.e., Uber Technologies and CVR Energy go up and down completely randomly.
Pair Corralation between Uber Technologies and CVR Energy
Assuming the 90 days trading horizon Uber Technologies is expected to under-perform the CVR Energy. But the stock apears to be less risky and, when comparing its historical volatility, Uber Technologies is 1.53 times less risky than CVR Energy. The stock trades about -0.21 of its potential returns per unit of risk. The CVR Energy is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 1,911 in CVR Energy on September 12, 2024 and sell it today you would earn a total of 62.00 from holding CVR Energy or generate 3.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 91.3% |
| Values | Daily Returns |
Uber Technologies vs. CVR Energy
Performance |
| Timeline |
| Uber Technologies |
| CVR Energy |
Uber Technologies and CVR Energy Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and CVR Energy
The main advantage of trading using opposite Uber Technologies and CVR Energy positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, CVR Energy 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 CVR Energy will offset losses from the drop in CVR Energy's long position.| Uber Technologies vs. Home Depot | Uber Technologies vs. Chrysalis Investments | Uber Technologies vs. Neometals | Uber Technologies vs. Coor Service Management |
| CVR Energy vs. One Media iP | CVR Energy vs. Prosiebensat 1 Media | CVR Energy vs. Bell Food Group | CVR Energy vs. JD Sports Fashion |
Check out your portfolio center.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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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