Correlation Between Uber Technologies and Autodesk

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

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

Diversification Opportunities for Uber Technologies and Autodesk

-0.4

Correlation Coefficient

Uber Technologies  Autodesk

Very good diversification

The 3 months correlation between Uber and Autodesk is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Autodesk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autodesk and Uber Technologies 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 Uber Technologies are associated (or correlated) with Autodesk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autodesk has no effect on the direction of Uber Technologies i.e., Uber Technologies and Autodesk go up and down completely randomly.

Pair Corralation between Uber Technologies and Autodesk

Assuming the 90 days trading horizon Uber Technologies is expected to generate 1.2 times more return on investment than Autodesk. However, Uber Technologies is 1.2 times more volatile than Autodesk. It trades about 0.08 of its potential returns per unit of risk. Autodesk is currently generating about 0.06 per unit of risk. If you would invest  3,955  in Uber Technologies on October 12, 2024 and sell it today you would earn a total of  5,845  from holding Uber Technologies or generate 147.79% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	99.6%
Values	Daily Returns

Uber Technologies  vs.  Autodesk

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. Despite weak performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Autodesk

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Autodesk are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Autodesk sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Uber Technologies and Autodesk

The main advantage of trading using opposite Uber Technologies and Autodesk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Autodesk 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 Autodesk will offset losses from the drop in Autodesk's long position.

The idea behind Uber Technologies and Autodesk 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.