Correlation Between Uber Technologies and Leidos Holdings
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Leidos Holdings 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 Leidos Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Leidos Holdings, you can compare the effects of market volatilities on Uber Technologies and Leidos Holdings 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 Leidos Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Leidos Holdings.
Diversification Opportunities for Uber Technologies and Leidos Holdings
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Uber and Leidos is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Leidos Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Leidos Holdings 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 Leidos Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Leidos Holdings has no effect on the direction of Uber Technologies i.e., Uber Technologies and Leidos Holdings go up and down completely randomly.
Pair Corralation between Uber Technologies and Leidos Holdings
Assuming the 90 days trading horizon Uber Technologies is expected to generate 1.52 times less return on investment than Leidos Holdings. In addition to that, Uber Technologies is 1.21 times more volatile than Leidos Holdings. It trades about 0.08 of its total potential returns per unit of risk. Leidos Holdings is currently generating about 0.14 per unit of volatility. If you would invest 4,255 in Leidos Holdings on September 12, 2024 and sell it today you would earn a total of 5,625 from holding Leidos Holdings or generate 132.2% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 87.85% |
| Values | Daily Returns |
Uber Technologies vs. Leidos Holdings
Performance |
| Timeline |
| Uber Technologies |
| Leidos Holdings |
Uber Technologies and Leidos Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and Leidos Holdings
The main advantage of trading using opposite Uber Technologies and Leidos Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Leidos Holdings 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 Leidos Holdings will offset losses from the drop in Leidos Holdings' long position.| Uber Technologies vs. ServiceNow | Uber Technologies vs. Shopify | Uber Technologies vs. Autodesk | Uber Technologies vs. The Trade Desk |
| Leidos Holdings vs. Unity Software | Leidos Holdings vs. Take Two Interactive Software | Leidos Holdings vs. Uber Technologies | Leidos Holdings vs. Cognizant Technology Solutions |
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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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