Correlation Between Uber Technologies and Kaufman Broad
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Kaufman Broad 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 Kaufman Broad into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Kaufman Broad SA, you can compare the effects of market volatilities on Uber Technologies and Kaufman Broad 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 Kaufman Broad. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Kaufman Broad.
Diversification Opportunities for Uber Technologies and Kaufman Broad
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Uber and Kaufman is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Kaufman Broad SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Kaufman Broad SA 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 Kaufman Broad. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Kaufman Broad SA has no effect on the direction of Uber Technologies i.e., Uber Technologies and Kaufman Broad go up and down completely randomly.
Pair Corralation between Uber Technologies and Kaufman Broad
Assuming the 90 days trading horizon Uber Technologies is expected to under-perform the Kaufman Broad. In addition to that, Uber Technologies is 1.52 times more volatile than Kaufman Broad SA. It trades about -0.07 of its total potential returns per unit of risk. Kaufman Broad SA is currently generating about 0.03 per unit of volatility. If you would invest 3,110 in Kaufman Broad SA on September 26, 2024 and sell it today you would earn a total of 60.00 from holding Kaufman Broad SA or generate 1.93% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Uber Technologies vs. Kaufman Broad SA
Performance |
Timeline |
Uber Technologies |
Kaufman Broad SA |
Uber Technologies and Kaufman Broad Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Uber Technologies and Kaufman Broad
The main advantage of trading using opposite Uber Technologies and Kaufman Broad positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Kaufman Broad 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 Kaufman Broad will offset losses from the drop in Kaufman Broad's long position.Uber Technologies vs. ALBIS LEASING AG | Uber Technologies vs. The Yokohama Rubber | Uber Technologies vs. Martin Marietta Materials | Uber Technologies vs. EAGLE MATERIALS |
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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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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