Correlation Between Uber Technologies and Braskem SA
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Braskem SA 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 Braskem SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Braskem SA, you can compare the effects of market volatilities on Uber Technologies and Braskem SA 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 Braskem SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Braskem SA.
Diversification Opportunities for Uber Technologies and Braskem SA
-0.02 | Correlation Coefficient |
Good diversification
The 3 months correlation between Uber and Braskem is -0.02. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Braskem SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braskem SA 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 Braskem SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braskem SA has no effect on the direction of Uber Technologies i.e., Uber Technologies and Braskem SA go up and down completely randomly.
Pair Corralation between Uber Technologies and Braskem SA
Assuming the 90 days trading horizon Uber Technologies is expected to generate 1.28 times more return on investment than Braskem SA. However, Uber Technologies is 1.28 times more volatile than Braskem SA. It trades about -0.06 of its potential returns per unit of risk. Braskem SA is currently generating about -0.13 per unit of risk. If you would invest 10,320 in Uber Technologies on September 12, 2024 and sell it today you would lose (460.00) from holding Uber Technologies or give up 4.46% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.24% |
| Values | Daily Returns |
Uber Technologies vs. Braskem SA
Performance |
| Timeline |
| Uber Technologies |
| Braskem SA |
Uber Technologies and Braskem SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and Braskem SA
The main advantage of trading using opposite Uber Technologies and Braskem SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Braskem SA 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 Braskem SA will offset losses from the drop in Braskem SA's long position.| Uber Technologies vs. ServiceNow | Uber Technologies vs. Shopify | Uber Technologies vs. Autodesk | Uber Technologies vs. The Trade Desk |
| Braskem SA vs. Braskem SA | Braskem SA vs. Braskem SA | Braskem SA vs. Unipar Carbocloro SA | Braskem SA vs. Unipar Carbocloro 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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