Correlation Between Uber Technologies and Sonida Senior

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

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

Diversification Opportunities for Uber Technologies and Sonida Senior

0.53

Correlation Coefficient

Uber Technologies  Sonida Senior

Very weak diversification

The 3 months correlation between Uber and Sonida is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Sonida Senior Living in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sonida Senior Living 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 Sonida Senior. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sonida Senior Living has no effect on the direction of Uber Technologies i.e., Uber Technologies and Sonida Senior go up and down completely randomly.

Pair Corralation between Uber Technologies and Sonida Senior

Given the investment horizon of 90 days Uber Technologies is expected to generate 1.14 times more return on investment than Sonida Senior. However, Uber Technologies is 1.14 times more volatile than Sonida Senior Living. It trades about 0.11 of its potential returns per unit of risk. Sonida Senior Living is currently generating about 0.05 per unit of risk. If you would invest  6,123  in Uber Technologies on December 18, 2024 and sell it today you would earn a total of  976.00  from holding Uber Technologies or generate 15.94% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

Uber Technologies  vs.  Sonida Senior Living

Uber Technologies

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies are ranked lower than 8 (%) 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.

Sonida Senior Living

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Sonida Senior Living are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, Sonida Senior may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Uber Technologies and Sonida Senior

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

The idea behind Uber Technologies and Sonida Senior Living 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.