Correlation Between H2O Retailing and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both H2O Retailing 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 H2O Retailing and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between H2O Retailing and Uber Technologies, you can compare the effects of market volatilities on H2O Retailing 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 H2O Retailing with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and Uber Technologies.
Diversification Opportunities for H2O Retailing and Uber Technologies
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between H2O and Uber is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and H2O Retailing 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 H2O Retailing 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 H2O Retailing i.e., H2O Retailing and Uber Technologies go up and down completely randomly.
Pair Corralation between H2O Retailing and Uber Technologies
Assuming the 90 days horizon H2O Retailing is expected to under-perform the Uber Technologies. But the stock apears to be less risky and, when comparing its historical volatility, H2O Retailing is 1.11 times less risky than Uber Technologies. The stock trades about -0.01 of its potential returns per unit of risk. The Uber Technologies is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest 5,919 in Uber Technologies on October 13, 2024 and sell it today you would earn a total of 552.00 from holding Uber Technologies or generate 9.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 94.44% |
| Values | Daily Returns |
H2O Retailing vs. Uber Technologies
Performance |
| Timeline |
| H2O Retailing |
| Uber Technologies |
H2O Retailing and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with H2O Retailing and Uber Technologies
The main advantage of trading using opposite H2O Retailing and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing 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.| H2O Retailing vs. Scandinavian Tobacco Group | H2O Retailing vs. Tradeweb Markets | H2O Retailing vs. Eidesvik Offshore ASA | H2O Retailing vs. CSSC Offshore Marine |
| Uber Technologies vs. H2O Retailing | Uber Technologies vs. HK Electric Investments | Uber Technologies vs. MEDCAW INVESTMENTS LS 01 | Uber Technologies vs. Scottish Mortgage Investment |
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 Global Correlations module to find global opportunities by holding instruments from different markets.
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