Correlation Between Uber Technologies and ALLSTATE

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

By analyzing existing cross correlation between Uber Technologies and ALLSTATE P 42, you can compare the effects of market volatilities on Uber Technologies and ALLSTATE 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 ALLSTATE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and ALLSTATE.

Diversification Opportunities for Uber Technologies and ALLSTATE

0.69

Correlation Coefficient

Uber Technologies  ALLSTATE

Poor diversification

The 3 months correlation between Uber and ALLSTATE is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and ALLSTATE P 42 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ALLSTATE P 42 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 ALLSTATE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ALLSTATE P 42 has no effect on the direction of Uber Technologies i.e., Uber Technologies and ALLSTATE go up and down completely randomly.

Pair Corralation between Uber Technologies and ALLSTATE

Given the investment horizon of 90 days Uber Technologies is expected to under-perform the ALLSTATE. But the stock apears to be less risky and, when comparing its historical volatility, Uber Technologies is 1.35 times less risky than ALLSTATE. The stock trades about -0.13 of its potential returns per unit of risk. The ALLSTATE P 42 is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  8,205  in ALLSTATE P 42 on October 7, 2024 and sell it today you would lose (463.00) from holding ALLSTATE P 42 or give up 5.64% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	75.61%
Values	Daily Returns

Uber Technologies  vs.  ALLSTATE P 42

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.

ALLSTATE P 42

Risk-Adjusted Performance

0 of 100

Insignificant

Over the last 90 days ALLSTATE P 42 has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for ALLSTATE P 42 investors.

Pair Trading with Uber Technologies and ALLSTATE

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

The idea behind Uber Technologies and ALLSTATE P 42 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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.