Correlation Between Anfield Resources and Uber Technologies

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

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

Diversification Opportunities for Anfield Resources and Uber Technologies

0.59

Correlation Coefficient

Anfield Resources  Uber Technologies

Very weak diversification

The 3 months correlation between Anfield and Uber is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Anfield Resources and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Anfield Resources 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 Anfield Resources 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 Anfield Resources i.e., Anfield Resources and Uber Technologies go up and down completely randomly.

Pair Corralation between Anfield Resources and Uber Technologies

Assuming the 90 days trading horizon Anfield Resources is expected to under-perform the Uber Technologies. In addition to that, Anfield Resources is 4.43 times more volatile than Uber Technologies. It trades about -0.17 of its total potential returns per unit of risk. Uber Technologies is currently generating about -0.39 per unit of volatility. If you would invest  6,856  in Uber Technologies on October 4, 2024 and sell it today you would lose (1,046) from holding Uber Technologies or give up 15.26% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Anfield Resources  vs.  Uber Technologies

Anfield Resources

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Anfield Resources are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile fundamental indicators, Anfield Resources reported solid returns over the last few months and may actually be approaching a breakup point.

Uber Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Uber Technologies 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 Anfield Resources and Uber Technologies

The main advantage of trading using opposite Anfield Resources and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anfield Resources 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.

The idea behind Anfield Resources and Uber Technologies 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.