Correlation Between Uber Technologies and Lion Biotechnologies

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

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

Diversification Opportunities for Uber Technologies and Lion Biotechnologies

0.52

Correlation Coefficient

Uber Technologies  Lion Biotechnologies

Very weak diversification

The 3 months correlation between Uber and Lion is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Lion Biotechnologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lion Biotechnologies 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 Lion Biotechnologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lion Biotechnologies has no effect on the direction of Uber Technologies i.e., Uber Technologies and Lion Biotechnologies go up and down completely randomly.

Pair Corralation between Uber Technologies and Lion Biotechnologies

Assuming the 90 days trading horizon Uber Technologies is expected to under-perform the Lion Biotechnologies. But the stock apears to be less risky and, when comparing its historical volatility, Uber Technologies is 2.01 times less risky than Lion Biotechnologies. The stock trades about -0.02 of its potential returns per unit of risk. The Lion Biotechnologies is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  763.00  in Lion Biotechnologies on September 23, 2024 and sell it today you would lose (72.00) from holding Lion Biotechnologies or give up 9.44% of portfolio value over 90 days.

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

Uber Technologies  vs.  Lion Biotechnologies

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.

Lion Biotechnologies

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Lion Biotechnologies has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in January 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Uber Technologies and Lion Biotechnologies

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

The idea behind Uber Technologies and Lion Biotechnologies 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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.