Correlation Between Leidos Holdings and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Leidos Holdings 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 Leidos Holdings and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Leidos Holdings and Uber Technologies, you can compare the effects of market volatilities on Leidos Holdings 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 Leidos Holdings with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Leidos Holdings and Uber Technologies.
Diversification Opportunities for Leidos Holdings and Uber Technologies
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Leidos and Uber is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Leidos Holdings and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Leidos Holdings 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 Leidos Holdings 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 Leidos Holdings i.e., Leidos Holdings and Uber Technologies go up and down completely randomly.
Pair Corralation between Leidos Holdings and Uber Technologies
Assuming the 90 days trading horizon Leidos Holdings is expected to generate 0.97 times more return on investment than Uber Technologies. However, Leidos Holdings is 1.03 times less risky than Uber Technologies. It trades about 0.1 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.09 per unit of risk. If you would invest 7,544 in Leidos Holdings on September 1, 2024 and sell it today you would earn a total of 2,442 from holding Leidos Holdings or generate 32.37% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.66% |
| Values | Daily Returns |
Leidos Holdings vs. Uber Technologies
Performance |
| Timeline |
| Leidos Holdings |
| Uber Technologies |
Leidos Holdings and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Leidos Holdings and Uber Technologies
The main advantage of trading using opposite Leidos Holdings and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Leidos Holdings 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.| Leidos Holdings vs. Telecomunicaes Brasileiras SA | Leidos Holdings vs. Charter Communications | Leidos Holdings vs. Marfrig Global Foods | Leidos Holdings vs. Multilaser Industrial SA |
| Uber Technologies vs. Warner Music Group | Uber Technologies vs. The Trade Desk | Uber Technologies vs. United Airlines Holdings | Uber Technologies vs. Tyson Foods |
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 Commodity Directory module to find actively traded commodities issued by global exchanges.
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