Correlation Between Uber Technologies and Coffee Holding
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Coffee Holding 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 Coffee Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Coffee Holding Co, you can compare the effects of market volatilities on Uber Technologies and Coffee Holding 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 Coffee Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Coffee Holding.
Diversification Opportunities for Uber Technologies and Coffee Holding
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Uber and Coffee is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Coffee Holding Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coffee Holding 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 Coffee Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coffee Holding has no effect on the direction of Uber Technologies i.e., Uber Technologies and Coffee Holding go up and down completely randomly.
Pair Corralation between Uber Technologies and Coffee Holding
Assuming the 90 days trading horizon Uber Technologies is expected to generate 0.43 times more return on investment than Coffee Holding. However, Uber Technologies is 2.34 times less risky than Coffee Holding. It trades about 0.29 of its potential returns per unit of risk. Coffee Holding Co is currently generating about -0.1 per unit of risk. If you would invest 5,790 in Uber Technologies on October 17, 2024 and sell it today you would earn a total of 716.00 from holding Uber Technologies or generate 12.37% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Uber Technologies vs. Coffee Holding Co
Performance |
Timeline |
Uber Technologies |
Coffee Holding |
Uber Technologies and Coffee Holding Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Uber Technologies and Coffee Holding
The main advantage of trading using opposite Uber Technologies and Coffee Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Coffee Holding 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 Coffee Holding will offset losses from the drop in Coffee Holding's long position.Uber Technologies vs. MAG SILVER | Uber Technologies vs. TELECOM ITALIA | Uber Technologies vs. UNIVMUSIC GRPADR050 | Uber Technologies vs. Charter Communications |
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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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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