Correlation Between Uber Technologies and Didi Global
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Didi Global 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 Didi Global into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Didi Global ADR, you can compare the effects of market volatilities on Uber Technologies and Didi Global 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 Didi Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Didi Global.
Diversification Opportunities for Uber Technologies and Didi Global
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Uber and Didi is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Didi Global ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Didi Global ADR 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 Didi Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Didi Global ADR has no effect on the direction of Uber Technologies i.e., Uber Technologies and Didi Global go up and down completely randomly.
Pair Corralation between Uber Technologies and Didi Global
Given the investment horizon of 90 days Uber Technologies is expected to generate 4.73 times less return on investment than Didi Global. But when comparing it to its historical volatility, Uber Technologies is 2.85 times less risky than Didi Global. It trades about 0.09 of its potential returns per unit of risk. Didi Global ADR is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 299.00 in Didi Global ADR on August 24, 2024 and sell it today you would earn a total of 136.00 from holding Didi Global ADR or generate 45.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 9.27% |
| Values | Daily Returns |
Uber Technologies vs. Didi Global ADR
Performance |
| Timeline |
| Uber Technologies |
| Didi Global ADR |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Uber Technologies and Didi Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and Didi Global
The main advantage of trading using opposite Uber Technologies and Didi Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Didi Global 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 Didi Global will offset losses from the drop in Didi Global's long position.| Uber Technologies vs. Manhattan Associates | Uber Technologies vs. Paycom Soft | Uber Technologies vs. Clearwater Analytics Holdings | Uber Technologies vs. Procore Technologies |
| Didi Global vs. LYFT Inc | Didi Global vs. Unity Software | Didi Global vs. Uber Technologies | Didi Global vs. Digital Turbine |
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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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