Correlation Between Gap, and Uber Technologies

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

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

Diversification Opportunities for Gap, and Uber Technologies

-0.5

Correlation Coefficient

Gap,  Uber Technologies

Very good diversification

The 3 months correlation between Gap, and Uber is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding The Gap, and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Gap, 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 The Gap, 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 Gap, i.e., Gap, and Uber Technologies go up and down completely randomly.

Pair Corralation between Gap, and Uber Technologies

Considering the 90-day investment horizon The Gap, is expected to under-perform the Uber Technologies. In addition to that, Gap, is 1.38 times more volatile than Uber Technologies. It trades about -0.04 of its total potential returns per unit of risk. Uber Technologies is currently generating about 0.14 per unit of volatility. If you would invest  6,156  in Uber Technologies on December 26, 2024 and sell it today you would earn a total of  1,405  from holding Uber Technologies or generate 22.82% return on investment over 90 days.

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

The Gap,  vs.  Uber Technologies

Gap,

Risk-Adjusted Performance

Very Weak

Over the last 90 days The Gap, has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest weak performance, the Stock's basic indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Uber Technologies

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies are ranked lower than 11 (%) 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 Gap, and Uber Technologies

The main advantage of trading using opposite Gap, and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gap, 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 The Gap, 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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.