Correlation Between Precision Drilling and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both Precision Drilling 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 Precision Drilling and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Precision Drilling and Uber Technologies, you can compare the effects of market volatilities on Precision Drilling 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 Precision Drilling with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Precision Drilling and Uber Technologies.
Diversification Opportunities for Precision Drilling and Uber Technologies
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Precision and Uber is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Precision Drilling and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Precision Drilling 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 Precision Drilling 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 Precision Drilling i.e., Precision Drilling and Uber Technologies go up and down completely randomly.
Pair Corralation between Precision Drilling and Uber Technologies
Considering the 90-day investment horizon Precision Drilling is expected to generate 0.98 times more return on investment than Uber Technologies. However, Precision Drilling is 1.02 times less risky than Uber Technologies. It trades about 0.11 of its potential returns per unit of risk. Uber Technologies is currently generating about -0.11 per unit of risk. If you would invest 5,792 in Precision Drilling on August 29, 2024 and sell it today you would earn a total of 368.00 from holding Precision Drilling or generate 6.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Precision Drilling vs. Uber Technologies
Performance |
| Timeline |
| Precision Drilling |
| Uber Technologies |
Precision Drilling and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Precision Drilling and Uber Technologies
The main advantage of trading using opposite Precision Drilling and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Precision Drilling 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.| Precision Drilling vs. Helmerich and Payne | Precision Drilling vs. Nabors Industries | Precision Drilling vs. Seadrill Limited | Precision Drilling vs. Patterson UTI Energy |
| Uber Technologies vs. Zoom Video Communications | Uber Technologies vs. Snowflake | Uber Technologies vs. Workday | Uber Technologies vs. C3 Ai 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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