Correlation Between Maxeon Solar and Uber Technologies

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Can any of the company-specific risk be diversified away by investing in both Maxeon Solar 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 Maxeon Solar and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Maxeon Solar Technologies and Uber Technologies, you can compare the effects of market volatilities on Maxeon Solar 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 Maxeon Solar with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Maxeon Solar and Uber Technologies.

Diversification Opportunities for Maxeon Solar and Uber Technologies

-0.31
  Correlation Coefficient

Very good diversification

The 3 months correlation between Maxeon and Uber is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding Maxeon Solar Technologies and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Maxeon Solar 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 Maxeon Solar Technologies 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 Maxeon Solar i.e., Maxeon Solar and Uber Technologies go up and down completely randomly.

Pair Corralation between Maxeon Solar and Uber Technologies

Assuming the 90 days horizon Maxeon Solar Technologies is expected to generate 4.64 times more return on investment than Uber Technologies. However, Maxeon Solar is 4.64 times more volatile than Uber Technologies. It trades about 0.02 of its potential returns per unit of risk. Uber Technologies is currently generating about -0.06 per unit of risk. If you would invest  880.00  in Maxeon Solar Technologies on September 18, 2024 and sell it today you would lose (190.00) from holding Maxeon Solar Technologies or give up 21.59% of portfolio value over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy92.19%
ValuesDaily Returns

Maxeon Solar Technologies  vs.  Uber Technologies

 Performance 
       Timeline  
Maxeon Solar Technologies 

Risk-Adjusted Performance

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Weak
 
Strong
Modest
Over the last 90 days Maxeon Solar Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly uncertain basic indicators, Maxeon Solar reported solid returns over the last few months and may actually be approaching a breakup point.
Uber Technologies 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
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 fragile 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.

Maxeon Solar and Uber Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Maxeon Solar and Uber Technologies

The main advantage of trading using opposite Maxeon Solar and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Maxeon Solar 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 Maxeon Solar Technologies 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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.

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