Correlation Between AAC TECHNOLOGHLDGADR and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both AAC TECHNOLOGHLDGADR and Uber Technologies 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 AAC TECHNOLOGHLDGADR and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AAC TECHNOLOGHLDGADR and Uber Technologies, you can compare the effects of market volatilities on AAC TECHNOLOGHLDGADR and Uber Technologies 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 AAC TECHNOLOGHLDGADR with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of AAC TECHNOLOGHLDGADR and Uber Technologies.
Diversification Opportunities for AAC TECHNOLOGHLDGADR and Uber Technologies
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between AAC and Uber is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding AAC TECHNOLOGHLDGADR and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and AAC TECHNOLOGHLDGADR 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 AAC TECHNOLOGHLDGADR are associated (or correlated) with Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of AAC TECHNOLOGHLDGADR i.e., AAC TECHNOLOGHLDGADR and Uber Technologies go up and down completely randomly.
Pair Corralation between AAC TECHNOLOGHLDGADR and Uber Technologies
Assuming the 90 days horizon AAC TECHNOLOGHLDGADR is expected to generate 1.91 times more return on investment than Uber Technologies. However, AAC TECHNOLOGHLDGADR is 1.91 times more volatile than Uber Technologies. It trades about 0.17 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.13 per unit of risk. If you would invest 360.00 in AAC TECHNOLOGHLDGADR on September 1, 2024 and sell it today you would earn a total of 46.00 from holding AAC TECHNOLOGHLDGADR or generate 12.78% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AAC TECHNOLOGHLDGADR vs. Uber Technologies
Performance |
| Timeline |
| AAC TECHNOLOGHLDGADR |
| Uber Technologies |
AAC TECHNOLOGHLDGADR and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AAC TECHNOLOGHLDGADR and Uber Technologies
The main advantage of trading using opposite AAC TECHNOLOGHLDGADR and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AAC TECHNOLOGHLDGADR position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| AAC TECHNOLOGHLDGADR vs. Motorola Solutions | AAC TECHNOLOGHLDGADR vs. Nokia | AAC TECHNOLOGHLDGADR vs. ZTE Corporation | AAC TECHNOLOGHLDGADR vs. Hewlett Packard Enterprise |
| Uber Technologies vs. Apple Inc | Uber Technologies vs. Apple Inc | Uber Technologies vs. Apple Inc | Uber Technologies vs. Apple Inc |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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