Correlation Between Uber Technologies and ICC Holdings

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

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

Diversification Opportunities for Uber Technologies and ICC Holdings

-0.37

Correlation Coefficient

Uber Technologies  ICC Holdings

Very good diversification

The 3 months correlation between Uber and ICC is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and ICC Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ICC Holdings 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 ICC Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ICC Holdings has no effect on the direction of Uber Technologies i.e., Uber Technologies and ICC Holdings go up and down completely randomly.

Pair Corralation between Uber Technologies and ICC Holdings

Given the investment horizon of 90 days Uber Technologies is expected to generate 3.94 times more return on investment than ICC Holdings. However, Uber Technologies is 3.94 times more volatile than ICC Holdings. It trades about 0.14 of its potential returns per unit of risk. ICC Holdings is currently generating about 0.02 per unit of risk. 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	Insignificant
Accuracy	86.67%
Values	Daily Returns

Uber Technologies  vs.  ICC Holdings

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.

ICC Holdings

Risk-Adjusted Performance

Weak

Over the last 90 days ICC Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong fundamental indicators, ICC Holdings is not utilizing all of its potentials. The current stock price confusion, may contribute to short-horizon losses for the traders.

Pair Trading with Uber Technologies and ICC Holdings

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

The idea behind Uber Technologies and ICC Holdings 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.