Correlation Between Uber Technologies and Gentex

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

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

Diversification Opportunities for Uber Technologies and Gentex

-0.06

Correlation Coefficient

Uber Technologies  Gentex

Good diversification

The 3 months correlation between Uber and Gentex is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Gentex in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gentex 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 Gentex. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gentex has no effect on the direction of Uber Technologies i.e., Uber Technologies and Gentex go up and down completely randomly.

Pair Corralation between Uber Technologies and Gentex

Given the investment horizon of 90 days Uber Technologies is expected to under-perform the Gentex. In addition to that, Uber Technologies is 1.88 times more volatile than Gentex. It trades about -0.01 of its total potential returns per unit of risk. Gentex is currently generating about 0.09 per unit of volatility. If you would invest  2,869  in Gentex on September 12, 2024 and sell it today you would earn a total of  246.00  from holding Gentex or generate 8.57% return on investment over 90 days.

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

Uber Technologies  vs.  Gentex

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. Even with relatively invariable technical and fundamental indicators, Uber Technologies is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

Gentex

Risk-Adjusted Performance

7 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gentex are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, Gentex may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Uber Technologies and Gentex

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

The idea behind Uber Technologies and Gentex 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.

Check out your portfolio center.

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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.