Correlation Between Uber Technologies and Lifevantage
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Lifevantage 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 Lifevantage into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Lifevantage, you can compare the effects of market volatilities on Uber Technologies and Lifevantage 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 Lifevantage. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Lifevantage.
Diversification Opportunities for Uber Technologies and Lifevantage
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Uber and Lifevantage is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Lifevantage in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lifevantage 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 Lifevantage. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lifevantage has no effect on the direction of Uber Technologies i.e., Uber Technologies and Lifevantage go up and down completely randomly.
Pair Corralation between Uber Technologies and Lifevantage
Given the investment horizon of 90 days Uber Technologies is expected to under-perform the Lifevantage. But the stock apears to be less risky and, when comparing its historical volatility, Uber Technologies is 1.83 times less risky than Lifevantage. The stock trades about -0.06 of its potential returns per unit of risk. The Lifevantage is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 1,346 in Lifevantage on September 5, 2024 and sell it today you would earn a total of 138.00 from holding Lifevantage or generate 10.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uber Technologies vs. Lifevantage
Performance |
| Timeline |
| Uber Technologies |
| Lifevantage |
Uber Technologies and Lifevantage Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and Lifevantage
The main advantage of trading using opposite Uber Technologies and Lifevantage positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Lifevantage 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 Lifevantage will offset losses from the drop in Lifevantage's long position.| Uber Technologies vs. Zoom Video Communications | Uber Technologies vs. Snowflake | Uber Technologies vs. Workday | Uber Technologies vs. C3 Ai Inc |
| Lifevantage vs. Seneca Foods Corp | Lifevantage vs. Central Garden Pet | Lifevantage vs. Central Garden Pet | Lifevantage vs. Lifeway Foods |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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