Correlation Between Uber Technologies and GX AI
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and GX AI 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 Uber Technologies and GX AI into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and GX AI TECH, you can compare the effects of market volatilities on Uber Technologies and GX AI 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 Uber Technologies with a short position of GX AI. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and GX AI.
Diversification Opportunities for Uber Technologies and GX AI
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Uber and BAIQ39 is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and GX AI TECH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GX AI TECH and Uber Technologies 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 Uber Technologies are associated (or correlated) with GX AI. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GX AI TECH has no effect on the direction of Uber Technologies i.e., Uber Technologies and GX AI go up and down completely randomly.
Pair Corralation between Uber Technologies and GX AI
Assuming the 90 days trading horizon Uber Technologies is expected to generate 1.78 times more return on investment than GX AI. However, Uber Technologies is 1.78 times more volatile than GX AI TECH. It trades about 0.1 of its potential returns per unit of risk. GX AI TECH is currently generating about 0.14 per unit of risk. If you would invest 3,250 in Uber Technologies on September 20, 2024 and sell it today you would earn a total of 6,426 from holding Uber Technologies or generate 197.72% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 55.71% |
| Values | Daily Returns |
Uber Technologies vs. GX AI TECH
Performance |
| Timeline |
| Uber Technologies |
| GX AI TECH |
Uber Technologies and GX AI Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and GX AI
The main advantage of trading using opposite Uber Technologies and GX AI positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, GX AI 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 GX AI will offset losses from the drop in GX AI's long position.The idea behind Uber Technologies and GX AI TECH pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| GX AI vs. NXP Semiconductors NV | GX AI vs. Palantir Technologies | GX AI vs. United Rentals | GX AI vs. Spotify Technology SA |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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