Correlation Between Uber Technologies and Luxfer Holdings
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Luxfer 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 Luxfer 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 Luxfer Holdings PLC, you can compare the effects of market volatilities on Uber Technologies and Luxfer 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 Luxfer Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Luxfer Holdings.
Diversification Opportunities for Uber Technologies and Luxfer Holdings
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Uber and Luxfer is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Luxfer Holdings PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Luxfer Holdings PLC 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 Luxfer Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Luxfer Holdings PLC has no effect on the direction of Uber Technologies i.e., Uber Technologies and Luxfer Holdings go up and down completely randomly.
Pair Corralation between Uber Technologies and Luxfer Holdings
Given the investment horizon of 90 days Uber Technologies is expected to under-perform the Luxfer Holdings. But the stock apears to be less risky and, when comparing its historical volatility, Uber Technologies is 1.3 times less risky than Luxfer Holdings. The stock trades about -0.12 of its potential returns per unit of risk. The Luxfer Holdings PLC is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 1,286 in Luxfer Holdings PLC on August 28, 2024 and sell it today you would earn a total of 148.00 from holding Luxfer Holdings PLC or generate 11.51% 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. Luxfer Holdings PLC
Performance |
| Timeline |
| Uber Technologies |
| Luxfer Holdings PLC |
Uber Technologies and Luxfer Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and Luxfer Holdings
The main advantage of trading using opposite Uber Technologies and Luxfer Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Luxfer 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 Luxfer Holdings will offset losses from the drop in Luxfer Holdings' long position.| Uber Technologies vs. Kingsoft Cloud Holdings | Uber Technologies vs. AMTD Digital | Uber Technologies vs. Zoom Video Communications | Uber Technologies vs. Snowflake |
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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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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