Correlation Between Uber Technologies and Costco Wholesale
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Costco Wholesale 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 Costco Wholesale into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Costco Wholesale, you can compare the effects of market volatilities on Uber Technologies and Costco Wholesale 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 Costco Wholesale. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Costco Wholesale.
Diversification Opportunities for Uber Technologies and Costco Wholesale
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Uber and Costco is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Costco Wholesale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Costco Wholesale 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 Costco Wholesale. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Costco Wholesale has no effect on the direction of Uber Technologies i.e., Uber Technologies and Costco Wholesale go up and down completely randomly.
Pair Corralation between Uber Technologies and Costco Wholesale
Assuming the 90 days trading horizon Uber Technologies is expected to generate 1.72 times more return on investment than Costco Wholesale. However, Uber Technologies is 1.72 times more volatile than Costco Wholesale. It trades about 0.09 of its potential returns per unit of risk. Costco Wholesale is currently generating about 0.12 per unit of risk. If you would invest 3,750 in Uber Technologies on October 7, 2024 and sell it today you would earn a total of 6,156 from holding Uber Technologies or generate 164.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Uber Technologies vs. Costco Wholesale
Performance |
| Timeline |
| Uber Technologies |
| Costco Wholesale |
Uber Technologies and Costco Wholesale Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and Costco Wholesale
The main advantage of trading using opposite Uber Technologies and Costco Wholesale positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Costco Wholesale 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 Costco Wholesale will offset losses from the drop in Costco Wholesale's long position.| Uber Technologies vs. The Trade Desk | Uber Technologies vs. Synchrony Financial | Uber Technologies vs. New Oriental Education | Uber Technologies vs. Prudential Financial |
| Costco Wholesale vs. Nordon Indstrias Metalrgicas | Costco Wholesale vs. Truist Financial | Costco Wholesale vs. Metalurgica Gerdau SA | Costco Wholesale vs. Metalrgica Riosulense 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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