Correlation Between CARSALES and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both CARSALES 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 CARSALES and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CARSALESCOM and Uber Technologies, you can compare the effects of market volatilities on CARSALES 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 CARSALES with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CARSALES and Uber Technologies.
Diversification Opportunities for CARSALES and Uber Technologies
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CARSALES and Uber is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding CARSALESCOM and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and CARSALES 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 CARSALESCOM 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 CARSALES i.e., CARSALES and Uber Technologies go up and down completely randomly.
Pair Corralation between CARSALES and Uber Technologies
Assuming the 90 days trading horizon CARSALESCOM is expected to generate 1.16 times more return on investment than Uber Technologies. However, CARSALES is 1.16 times more volatile than Uber Technologies. It trades about 0.19 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.16 per unit of risk. If you would invest 2,220 in CARSALESCOM on November 7, 2024 and sell it today you would earn a total of 160.00 from holding CARSALESCOM or generate 7.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CARSALESCOM vs. Uber Technologies
Performance |
| Timeline |
| CARSALESCOM |
| Uber Technologies |
CARSALES and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CARSALES and Uber Technologies
The main advantage of trading using opposite CARSALES and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CARSALES 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.| CARSALES vs. ANTA SPORTS PRODUCT | CARSALES vs. Playtech plc | CARSALES vs. SOEDER SPORTFISKE AB | CARSALES vs. FORTRESS BIOTECHPRFA 25 |
| Uber Technologies vs. Salesforce | Uber Technologies vs. SAP SE | Uber Technologies vs. PagerDuty | Uber Technologies vs. Rocket Internet SE |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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