Correlation Between Uber Technologies and Amaroq Minerals

Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Amaroq Minerals 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 Amaroq Minerals into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Uber Technologies and Amaroq Minerals, you can compare the effects of market volatilities on Uber Technologies and Amaroq Minerals 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 Amaroq Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Amaroq Minerals.

Diversification Opportunities for Uber Technologies and Amaroq Minerals

-0.3

Correlation Coefficient

Uber Technologies  Amaroq Minerals

Very good diversification

The 3 months correlation between Uber and Amaroq is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Amaroq Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amaroq Minerals 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 Amaroq Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amaroq Minerals has no effect on the direction of Uber Technologies i.e., Uber Technologies and Amaroq Minerals go up and down completely randomly.

Pair Corralation between Uber Technologies and Amaroq Minerals

Assuming the 90 days trading horizon Uber Technologies is expected to generate 1.12 times more return on investment than Amaroq Minerals. However, Uber Technologies is 1.12 times more volatile than Amaroq Minerals. It trades about 0.12 of its potential returns per unit of risk. Amaroq Minerals is currently generating about -0.05 per unit of risk. If you would invest  6,070  in Uber Technologies on December 30, 2024 and sell it today you would earn a total of  1,240  from holding Uber Technologies or generate 20.43% 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.  Amaroq Minerals

Uber Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite quite unsteady essential indicators, Uber Technologies disclosed solid returns over the last few months and may actually be approaching a breakup point.

Amaroq Minerals

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amaroq Minerals has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Uber Technologies and Amaroq Minerals

The main advantage of trading using opposite Uber Technologies and Amaroq Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Amaroq Minerals 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 Amaroq Minerals will offset losses from the drop in Amaroq Minerals' long position.

The idea behind Uber Technologies and Amaroq Minerals pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.