Correlation Between Uber Technologies and Wienerberger

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

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

Diversification Opportunities for Uber Technologies and Wienerberger

0.05

Correlation Coefficient

Uber Technologies  Wienerberger

Significant diversification

The 3 months correlation between Uber and Wienerberger is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Wienerberger AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wienerberger AG 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 Wienerberger. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wienerberger AG has no effect on the direction of Uber Technologies i.e., Uber Technologies and Wienerberger go up and down completely randomly.

Pair Corralation between Uber Technologies and Wienerberger

Given the investment horizon of 90 days Uber Technologies is expected to generate 1.72 times more return on investment than Wienerberger. However, Uber Technologies is 1.72 times more volatile than Wienerberger AG. It trades about 0.09 of its potential returns per unit of risk. Wienerberger AG is currently generating about 0.03 per unit of risk. If you would invest  2,555  in Uber Technologies on September 26, 2024 and sell it today you would earn a total of  3,632  from holding Uber Technologies or generate 142.15% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	64.52%
Values	Daily Returns

Uber Technologies  vs.  Wienerberger AG

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 January 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Wienerberger AG

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Wienerberger AG has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable fundamental drivers, Wienerberger is not utilizing all of its potentials. The recent stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Uber Technologies and Wienerberger

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

The idea behind Uber Technologies and Wienerberger AG 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.