Correlation Between Uber Technologies and Ecolab
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Ecolab 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 Ecolab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Ecolab Inc, you can compare the effects of market volatilities on Uber Technologies and Ecolab 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 Ecolab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Ecolab.
Diversification Opportunities for Uber Technologies and Ecolab
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uber and Ecolab is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Ecolab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ecolab Inc 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 Ecolab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ecolab Inc has no effect on the direction of Uber Technologies i.e., Uber Technologies and Ecolab go up and down completely randomly.
Pair Corralation between Uber Technologies and Ecolab
Given the investment horizon of 90 days Uber Technologies is expected to generate 2.95 times more return on investment than Ecolab. However, Uber Technologies is 2.95 times more volatile than Ecolab Inc. It trades about 0.01 of its potential returns per unit of risk. Ecolab Inc is currently generating about 0.01 per unit of risk. If you would invest 7,189 in Uber Technologies on September 2, 2024 and sell it today you would earn a total of 7.00 from holding Uber Technologies or generate 0.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uber Technologies vs. Ecolab Inc
Performance |
| Timeline |
| Uber Technologies |
| Ecolab Inc |
Uber Technologies and Ecolab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and Ecolab
The main advantage of trading using opposite Uber Technologies and Ecolab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Ecolab 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 Ecolab will offset losses from the drop in Ecolab's long position.| Uber Technologies vs. Zoom Video Communications | Uber Technologies vs. Snowflake | Uber Technologies vs. Workday | Uber Technologies vs. C3 Ai Inc |
| Ecolab vs. Linde plc Ordinary | Ecolab vs. Air Products and | Ecolab vs. Aquagold International | Ecolab vs. Thrivent High Yield |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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