Correlation Between Highlight Communications and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Highlight Communications 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 Highlight Communications and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Highlight Communications AG and Uber Technologies, you can compare the effects of market volatilities on Highlight Communications 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 Highlight Communications with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Highlight Communications and Uber Technologies.
Diversification Opportunities for Highlight Communications and Uber Technologies
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Highlight and Uber is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Highlight Communications AG and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Highlight Communications 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 Highlight Communications AG 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 Highlight Communications i.e., Highlight Communications and Uber Technologies go up and down completely randomly.
Pair Corralation between Highlight Communications and Uber Technologies
Assuming the 90 days trading horizon Highlight Communications AG is expected to generate 1.05 times more return on investment than Uber Technologies. However, Highlight Communications is 1.05 times more volatile than Uber Technologies. It trades about 0.12 of its potential returns per unit of risk. Uber Technologies is currently generating about -0.15 per unit of risk. If you would invest 98.00 in Highlight Communications AG on September 25, 2024 and sell it today you would earn a total of 13.00 from holding Highlight Communications AG or generate 13.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Highlight Communications AG vs. Uber Technologies
Performance |
| Timeline |
| Highlight Communications |
| Uber Technologies |
Highlight Communications and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Highlight Communications and Uber Technologies
The main advantage of trading using opposite Highlight Communications and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Highlight Communications 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.| Highlight Communications vs. The Walt Disney | Highlight Communications vs. Charter Communications | Highlight Communications vs. Warner Music Group | Highlight Communications vs. ViacomCBS |
| Uber Technologies vs. FUYO GENERAL LEASE | Uber Technologies vs. PLAYSTUDIOS A DL 0001 | Uber Technologies vs. Air Lease | Uber Technologies vs. Highlight Communications AG |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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