Correlation Between Uber Technologies and T-MOBILE

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

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

Diversification Opportunities for Uber Technologies and T-MOBILE

-0.16

Correlation Coefficient

Uber Technologies  T-MOBILE

Good diversification

The 3 months correlation between Uber and T-MOBILE is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and T MOBILE US in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T MOBILE US 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 T-MOBILE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T MOBILE US has no effect on the direction of Uber Technologies i.e., Uber Technologies and T-MOBILE go up and down completely randomly.

Pair Corralation between Uber Technologies and T-MOBILE

Assuming the 90 days trading horizon Uber Technologies is expected to under-perform the T-MOBILE. In addition to that, Uber Technologies is 1.98 times more volatile than T MOBILE US. It trades about -0.07 of its total potential returns per unit of risk. T MOBILE US is currently generating about -0.02 per unit of volatility. If you would invest  21,573  in T MOBILE US on October 7, 2024 and sell it today you would lose (298.00) from holding T MOBILE US or give up 1.38% of portfolio value over 90 days.

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

Uber Technologies  vs.  T MOBILE US

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 comparatively stable basic indicators, Uber Technologies is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

T MOBILE US

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in T MOBILE US are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, T-MOBILE unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Uber Technologies and T-MOBILE

The main advantage of trading using opposite Uber Technologies and T-MOBILE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, T-MOBILE 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 T-MOBILE will offset losses from the drop in T-MOBILE's long position.

The idea behind Uber Technologies and T MOBILE US 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.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.