Correlation Between Entegris and Uber Technologies

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

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

Diversification Opportunities for Entegris and Uber Technologies

0.18

Correlation Coefficient

Entegris  Uber Technologies

Average diversification

The 3 months correlation between Entegris and Uber is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Entegris and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Entegris 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 Entegris 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 Entegris i.e., Entegris and Uber Technologies go up and down completely randomly.

Pair Corralation between Entegris and Uber Technologies

Given the investment horizon of 90 days Entegris is expected to generate 4.65 times less return on investment than Uber Technologies. But when comparing it to its historical volatility, Entegris is 1.07 times less risky than Uber Technologies. It trades about 0.03 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest  6,021  in Uber Technologies on December 19, 2024 and sell it today you would earn a total of  1,134  from holding Uber Technologies or generate 18.83% return on investment over 90 days.

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

Entegris  vs.  Uber Technologies

Entegris

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Entegris are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Entegris is not utilizing all of its potentials. The latest stock price disturbance, may contribute to mid-run losses for the stockholders.

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. Even with relatively unfluctuating technical and fundamental indicators, Uber Technologies reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Entegris and Uber Technologies

The main advantage of trading using opposite Entegris and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Entegris 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 Entegris 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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.