Correlation Between CHINA SOUTHN and Uber Technologies
Can any of the company-specific risk be diversified away by investing in both CHINA SOUTHN 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 CHINA SOUTHN and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CHINA SOUTHN AIR H and Uber Technologies, you can compare the effects of market volatilities on CHINA SOUTHN 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 CHINA SOUTHN with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of CHINA SOUTHN and Uber Technologies.
Diversification Opportunities for CHINA SOUTHN and Uber Technologies
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between CHINA and Uber is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding CHINA SOUTHN AIR H and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and CHINA SOUTHN 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 CHINA SOUTHN AIR H 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 CHINA SOUTHN i.e., CHINA SOUTHN and Uber Technologies go up and down completely randomly.
Pair Corralation between CHINA SOUTHN and Uber Technologies
Assuming the 90 days trading horizon CHINA SOUTHN AIR H is expected to under-perform the Uber Technologies. In addition to that, CHINA SOUTHN is 1.89 times more volatile than Uber Technologies. It trades about -0.05 of its total potential returns per unit of risk. Uber Technologies is currently generating about 0.16 per unit of volatility. If you would invest 6,380 in Uber Technologies on November 7, 2024 and sell it today you would earn a total of 349.00 from holding Uber Technologies or generate 5.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
CHINA SOUTHN AIR H vs. Uber Technologies
Performance |
| Timeline |
| CHINA SOUTHN AIR |
| Uber Technologies |
CHINA SOUTHN and Uber Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CHINA SOUTHN and Uber Technologies
The main advantage of trading using opposite CHINA SOUTHN and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CHINA SOUTHN 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.| CHINA SOUTHN vs. Mitsui Chemicals | CHINA SOUTHN vs. KIMBALL ELECTRONICS | CHINA SOUTHN vs. Methode Electronics | CHINA SOUTHN vs. STMicroelectronics NV |
| 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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