Correlation Between Uber Technologies and Meta Platforms
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Meta Platforms 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 Meta Platforms into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Meta Platforms, you can compare the effects of market volatilities on Uber Technologies and Meta Platforms 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 Meta Platforms. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Meta Platforms.
Diversification Opportunities for Uber Technologies and Meta Platforms
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Uber and Meta is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Meta Platforms in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meta Platforms 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 Meta Platforms. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meta Platforms has no effect on the direction of Uber Technologies i.e., Uber Technologies and Meta Platforms go up and down completely randomly.
Pair Corralation between Uber Technologies and Meta Platforms
Given the investment horizon of 90 days Uber Technologies is expected to under-perform the Meta Platforms. In addition to that, Uber Technologies is 1.34 times more volatile than Meta Platforms. It trades about -0.24 of its total potential returns per unit of risk. Meta Platforms is currently generating about -0.06 per unit of volatility. If you would invest 58,201 in Meta Platforms on August 23, 2024 and sell it today you would lose (1,649) from holding Meta Platforms or give up 2.83% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uber Technologies vs. Meta Platforms
Performance |
| Timeline |
| Uber Technologies |
| Meta Platforms |
Uber Technologies and Meta Platforms Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and Meta Platforms
The main advantage of trading using opposite Uber Technologies and Meta Platforms positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Meta Platforms 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 Meta Platforms will offset losses from the drop in Meta Platforms' long position.| Uber Technologies vs. Zoom Video Communications | Uber Technologies vs. Snowflake | Uber Technologies vs. Workday | Uber Technologies vs. C3 Ai Inc |
| Meta Platforms vs. Zillow Group Class | Meta Platforms vs. Outbrain | Meta Platforms vs. TuanChe ADR | Meta Platforms vs. Weibo Corp |
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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