Correlation Between UMWELTBANK and Uber Technologies

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

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

Diversification Opportunities for UMWELTBANK and Uber Technologies

-0.3

Correlation Coefficient

UMWELTBANK  Uber Technologies

Very good diversification

The 3 months correlation between UMWELTBANK and Uber is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding UMWELTBANK and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and UMWELTBANK 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 UMWELTBANK are associated (or correlated) with Uber Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uber Technologies has no effect on the direction of UMWELTBANK i.e., UMWELTBANK and Uber Technologies go up and down completely randomly.

Pair Corralation between UMWELTBANK and Uber Technologies

Assuming the 90 days trading horizon UMWELTBANK is expected to generate 0.8 times more return on investment than Uber Technologies. However, UMWELTBANK is 1.26 times less risky than Uber Technologies. It trades about 0.15 of its potential returns per unit of risk. Uber Technologies is currently generating about -0.07 per unit of risk. If you would invest  498.00  in UMWELTBANK on September 27, 2024 and sell it today you would earn a total of  106.00  from holding UMWELTBANK or generate 21.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

UMWELTBANK  vs.  Uber Technologies

UMWELTBANK

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in UMWELTBANK are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain forward-looking signals, UMWELTBANK exhibited solid returns over the last few months and may actually be approaching a breakup point.

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. In spite of latest fragile performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with UMWELTBANK and Uber Technologies

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

The idea behind UMWELTBANK and Uber Technologies 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.