Correlation Between Asahi Group and Uber Technologies

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

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

Diversification Opportunities for Asahi Group and Uber Technologies

-0.17

Correlation Coefficient

Asahi Group  Uber Technologies

Good diversification

The 3 months correlation between Asahi and Uber is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Asahi Group Holdings and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Asahi Group 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 Asahi Group Holdings 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 Asahi Group i.e., Asahi Group and Uber Technologies go up and down completely randomly.

Pair Corralation between Asahi Group and Uber Technologies

Assuming the 90 days horizon Asahi Group Holdings is expected to under-perform the Uber Technologies. In addition to that, Asahi Group is 1.45 times more volatile than Uber Technologies. It trades about -0.09 of its total potential returns per unit of risk. Uber Technologies is currently generating about 0.05 per unit of volatility. If you would invest  6,745  in Uber Technologies on September 5, 2024 and sell it today you would earn a total of  111.00  from holding Uber Technologies or generate 1.65% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Asahi Group Holdings  vs.  Uber Technologies

Asahi Group Holdings

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Asahi Group Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Uber Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Uber Technologies may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Asahi Group and Uber Technologies

The main advantage of trading using opposite Asahi Group and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Asahi Group 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 Asahi Group Holdings 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 Transaction History module to view history of all your transactions and understand their impact on performance.