Correlation Between Uber Technologies and FORWARD AIR
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and FORWARD AIR 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 FORWARD AIR into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and FORWARD AIR P, you can compare the effects of market volatilities on Uber Technologies and FORWARD AIR 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 FORWARD AIR. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and FORWARD AIR.
Diversification Opportunities for Uber Technologies and FORWARD AIR
0.74 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uber and FORWARD is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and FORWARD AIR P in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FORWARD AIR P 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 FORWARD AIR. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FORWARD AIR P has no effect on the direction of Uber Technologies i.e., Uber Technologies and FORWARD AIR go up and down completely randomly.
Pair Corralation between Uber Technologies and FORWARD AIR
Assuming the 90 days trading horizon Uber Technologies is expected to generate 0.49 times more return on investment than FORWARD AIR. However, Uber Technologies is 2.05 times less risky than FORWARD AIR. It trades about 0.06 of its potential returns per unit of risk. FORWARD AIR P is currently generating about -0.03 per unit of risk. If you would invest 4,012 in Uber Technologies on November 8, 2024 and sell it today you would earn a total of 2,489 from holding Uber Technologies or generate 62.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.75% |
| Values | Daily Returns |
Uber Technologies vs. FORWARD AIR P
Performance |
| Timeline |
| Uber Technologies |
| FORWARD AIR P |
Uber Technologies and FORWARD AIR Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and FORWARD AIR
The main advantage of trading using opposite Uber Technologies and FORWARD AIR positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, FORWARD AIR 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 FORWARD AIR will offset losses from the drop in FORWARD AIR's long position.| Uber Technologies vs. SIVERS SEMICONDUCTORS AB | Uber Technologies vs. NorAm Drilling AS | Uber Technologies vs. Volkswagen AG | Uber Technologies vs. Darden Restaurants |
| FORWARD AIR vs. EIDESVIK OFFSHORE NK | FORWARD AIR vs. EAT WELL INVESTMENT | FORWARD AIR vs. Apollo Investment Corp | FORWARD AIR vs. SLR Investment 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.
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