Correlation Between HomeToGo and Uber Technologies

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

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

Diversification Opportunities for HomeToGo and Uber Technologies

0.1

Correlation Coefficient

HomeToGo  Uber Technologies

Average diversification

The 3 months correlation between HomeToGo and Uber is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding HomeToGo SE and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and HomeToGo 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 HomeToGo SE 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 HomeToGo i.e., HomeToGo and Uber Technologies go up and down completely randomly.

Pair Corralation between HomeToGo and Uber Technologies

Assuming the 90 days trading horizon HomeToGo SE is expected to generate 1.14 times more return on investment than Uber Technologies. However, HomeToGo is 1.14 times more volatile than Uber Technologies. It trades about 0.05 of its potential returns per unit of risk. Uber Technologies is currently generating about -0.09 per unit of risk. If you would invest  192.00  in HomeToGo SE on September 19, 2024 and sell it today you would earn a total of  14.00  from holding HomeToGo SE or generate 7.29% return on investment over 90 days.

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

HomeToGo SE  vs.  Uber Technologies

HomeToGo SE

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in HomeToGo SE are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile technical and fundamental indicators, HomeToGo may actually be approaching a critical reversion point that can send shares even higher in January 2025.

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 uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with HomeToGo and Uber Technologies

The main advantage of trading using opposite HomeToGo and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HomeToGo 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 HomeToGo SE 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.