Correlation Between United States and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both United States and Uber Technologies 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 United States and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between United States Steel and Uber Technologies, you can compare the effects of market volatilities on United States and Uber Technologies 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 United States with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of United States and Uber Technologies.
Diversification Opportunities for United States and Uber Technologies
0.37 | Correlation Coefficient |
Weak diversification
The 3 months correlation between United and Uber is 0.37. Overlapping area represents the amount of risk that can be diversified away by holding United States Steel and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and United States 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 United States Steel are associated (or correlated) with Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of United States i.e., United States and Uber Technologies go up and down completely randomly.
Pair Corralation between United States and Uber Technologies
Assuming the 90 days trading horizon United States Steel is expected to generate 0.84 times more return on investment than Uber Technologies. However, United States Steel is 1.18 times less risky than Uber Technologies. It trades about 0.2 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.06 per unit of risk. If you would invest 19,010 in United States Steel on September 5, 2024 and sell it today you would earn a total of 4,314 from holding United States Steel or generate 22.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
United States Steel vs. Uber Technologies
Performance |
| Timeline |
| United States Steel |
| Uber Technologies |
United States and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with United States and Uber Technologies
The main advantage of trading using opposite United States and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if United States position performs unexpectedly, Uber Technologies 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 Uber Technologies will offset losses from the drop in Uber Technologies' long position.| United States vs. Companhia Siderrgica Nacional | United States vs. Metalurgica Gerdau SA | United States vs. Metalurgica Gerdau SA | United States vs. Usinas Siderrgicas de |
| Uber Technologies vs. Shopify | Uber Technologies vs. Zoom Video Communications | Uber Technologies vs. Unity Software |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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