Correlation Between Uber Technologies and WW Grainger
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and WW Grainger 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 WW Grainger into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and WW Grainger, you can compare the effects of market volatilities on Uber Technologies and WW Grainger 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 WW Grainger. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and WW Grainger.
Diversification Opportunities for Uber Technologies and WW Grainger
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Uber and GWW is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and WW Grainger in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WW Grainger 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 WW Grainger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WW Grainger has no effect on the direction of Uber Technologies i.e., Uber Technologies and WW Grainger go up and down completely randomly.
Pair Corralation between Uber Technologies and WW Grainger
Assuming the 90 days trading horizon Uber Technologies is expected to generate 1.62 times more return on investment than WW Grainger. However, Uber Technologies is 1.62 times more volatile than WW Grainger. It trades about 0.09 of its potential returns per unit of risk. WW Grainger is currently generating about 0.06 per unit of risk. If you would invest 2,870 in Uber Technologies on November 30, 2024 and sell it today you would earn a total of 4,363 from holding Uber Technologies or generate 152.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Uber Technologies vs. WW Grainger
Performance |
| Timeline |
| Uber Technologies |
| WW Grainger |
Uber Technologies and WW Grainger Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Uber Technologies and WW Grainger
The main advantage of trading using opposite Uber Technologies and WW Grainger positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, WW Grainger 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 WW Grainger will offset losses from the drop in WW Grainger's long position.| Uber Technologies vs. Xinhua Winshare Publishing | Uber Technologies vs. EEDUCATION ALBERT AB | Uber Technologies vs. PLAYWAY SA ZY 10 | Uber Technologies vs. JD SPORTS FASH |
| WW Grainger vs. Games Workshop Group | WW Grainger vs. DETALION GAMES SA | WW Grainger vs. Penn National Gaming | WW Grainger vs. ScanSource |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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