Correlation Between Uber Technologies and NVIDIA Corp
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and NVIDIA Corp 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 NVIDIA Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and NVIDIA Corp, you can compare the effects of market volatilities on Uber Technologies and NVIDIA Corp 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 NVIDIA Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and NVIDIA Corp.
Diversification Opportunities for Uber Technologies and NVIDIA Corp
0.08 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Uber and NVIDIA is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and NVIDIA Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA Corp 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 NVIDIA Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA Corp has no effect on the direction of Uber Technologies i.e., Uber Technologies and NVIDIA Corp go up and down completely randomly.
Pair Corralation between Uber Technologies and NVIDIA Corp
Assuming the 90 days trading horizon Uber Technologies is expected to generate 0.44 times more return on investment than NVIDIA Corp. However, Uber Technologies is 2.29 times less risky than NVIDIA Corp. It trades about 0.21 of its potential returns per unit of risk. NVIDIA Corp is currently generating about 0.09 per unit of risk. If you would invest 6,920 in Uber Technologies on September 1, 2024 and sell it today you would earn a total of 295.00 from holding Uber Technologies or generate 4.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Uber Technologies vs. NVIDIA Corp
Performance |
| Timeline |
| Uber Technologies |
| NVIDIA Corp |
Uber Technologies and NVIDIA Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and NVIDIA Corp
The main advantage of trading using opposite Uber Technologies and NVIDIA Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, NVIDIA Corp 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 NVIDIA Corp will offset losses from the drop in NVIDIA Corp's long position.| Uber Technologies vs. Naturhouse Health SA | Uber Technologies vs. HCA Healthcare | Uber Technologies vs. Inspiration Healthcare Group | Uber Technologies vs. Science in Sport |
| NVIDIA Corp vs. Fidelity National Information | NVIDIA Corp vs. Uber Technologies | NVIDIA Corp vs. Microchip Technology | NVIDIA Corp vs. Celebrus Technologies plc |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Bonds Directory Find actively traded corporate debentures issued by US companies | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |