Correlation Between Uber Technologies and Nates Food

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

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

Diversification Opportunities for Uber Technologies and Nates Food

0.24

Correlation Coefficient

Uber Technologies  Nates Food

Modest diversification

The 3 months correlation between Uber and Nates is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Nates Food Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nates Food 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 Nates Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nates Food has no effect on the direction of Uber Technologies i.e., Uber Technologies and Nates Food go up and down completely randomly.

Pair Corralation between Uber Technologies and Nates Food

Given the investment horizon of 90 days Uber Technologies is expected to under-perform the Nates Food. But the stock apears to be less risky and, when comparing its historical volatility, Uber Technologies is 138.69 times less risky than Nates Food. The stock trades about -0.07 of its potential returns per unit of risk. The Nates Food Co is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest  0.01  in Nates Food Co on October 26, 2024 and sell it today you would earn a total of  0.00  from holding Nates Food Co or generate 0.0% return on investment over 90 days.

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

Uber Technologies  vs.  Nates Food Co

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 latest unfluctuating performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Nates Food

Risk-Adjusted Performance

27 of 100

Strong

Compared to the overall equity markets, risk-adjusted returns on investments in Nates Food Co are ranked lower than 27 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile primary indicators, Nates Food exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Uber Technologies and Nates Food

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

The idea behind Uber Technologies and Nates Food Co 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.