Correlation Between Uber Technologies and MACYS

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

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

Diversification Opportunities for Uber Technologies and MACYS

0.61

Correlation Coefficient

Uber Technologies  MACYS

Poor diversification

The 3 months correlation between Uber and MACYS is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and MACYS RETAIL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MACYS RETAIL HLDGS 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 MACYS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MACYS RETAIL HLDGS has no effect on the direction of Uber Technologies i.e., Uber Technologies and MACYS go up and down completely randomly.

Pair Corralation between Uber Technologies and MACYS

Given the investment horizon of 90 days Uber Technologies is expected to generate 1.66 times more return on investment than MACYS. However, Uber Technologies is 1.66 times more volatile than MACYS RETAIL HLDGS. It trades about 0.07 of its potential returns per unit of risk. MACYS RETAIL HLDGS is currently generating about 0.0 per unit of risk. If you would invest  2,944  in Uber Technologies on October 4, 2024 and sell it today you would earn a total of  3,088  from holding Uber Technologies or generate 104.89% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	94.56%
Values	Daily Returns

Uber Technologies  vs.  MACYS RETAIL HLDGS

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 unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

MACYS RETAIL HLDGS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MACYS RETAIL HLDGS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, MACYS is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Uber Technologies and MACYS

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

The idea behind Uber Technologies and MACYS RETAIL HLDGS 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.