Correlation Between Uber Technologies and WuXi AppTec
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and WuXi AppTec 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 WuXi AppTec into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and WuXi AppTec Co, you can compare the effects of market volatilities on Uber Technologies and WuXi AppTec 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 WuXi AppTec. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and WuXi AppTec.
Diversification Opportunities for Uber Technologies and WuXi AppTec
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uber and WuXi is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and WuXi AppTec Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WuXi AppTec 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 WuXi AppTec. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WuXi AppTec has no effect on the direction of Uber Technologies i.e., Uber Technologies and WuXi AppTec go up and down completely randomly.
Pair Corralation between Uber Technologies and WuXi AppTec
Given the investment horizon of 90 days Uber Technologies is expected to generate 1.19 times more return on investment than WuXi AppTec. However, Uber Technologies is 1.19 times more volatile than WuXi AppTec Co. It trades about 0.11 of its potential returns per unit of risk. WuXi AppTec Co is currently generating about 0.08 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 | Significant |
Accuracy | 98.36% |
Values | Daily Returns |
Uber Technologies vs. WuXi AppTec Co
Performance |
Timeline |
Uber Technologies |
WuXi AppTec |
Uber Technologies and WuXi AppTec Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Uber Technologies and WuXi AppTec
The main advantage of trading using opposite Uber Technologies and WuXi AppTec positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, WuXi AppTec 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 WuXi AppTec will offset losses from the drop in WuXi AppTec's long position.Uber Technologies vs. Zoom Video Communications | Uber Technologies vs. Snowflake | Uber Technologies vs. Workday | Uber Technologies vs. C3 Ai Inc |
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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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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