Correlation Between Uber Technologies and Stagwell

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

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

Diversification Opportunities for Uber Technologies and Stagwell

-0.01

Correlation Coefficient

Uber Technologies  Stagwell

Good diversification

The 3 months correlation between Uber and Stagwell is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Stagwell in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Stagwell 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 Stagwell. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Stagwell has no effect on the direction of Uber Technologies i.e., Uber Technologies and Stagwell go up and down completely randomly.

Pair Corralation between Uber Technologies and Stagwell

Given the investment horizon of 90 days Uber Technologies is expected to under-perform the Stagwell. In addition to that, Uber Technologies is 1.08 times more volatile than Stagwell. It trades about -0.07 of its total potential returns per unit of risk. Stagwell is currently generating about 0.05 per unit of volatility. If you would invest  615.00  in Stagwell on October 25, 2024 and sell it today you would earn a total of  37.00  from holding Stagwell or generate 6.02% 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.  Stagwell

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.

Stagwell

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Stagwell are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Stagwell may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Uber Technologies and Stagwell

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

The idea behind Uber Technologies and Stagwell 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.