Correlation Between Air Liquide and Uber Technologies

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Can any of the company-specific risk be diversified away by investing in both Air Liquide 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 Air Liquide and Uber Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Air Liquide SA and Uber Technologies, you can compare the effects of market volatilities on Air Liquide 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 Air Liquide with a short position of Uber Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Air Liquide and Uber Technologies.

Diversification Opportunities for Air Liquide and Uber Technologies

0.18
  Correlation Coefficient

Average diversification

The 3 months correlation between AIQUY and Uber Technologies is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding Air Liquide SA and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Air Liquide 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 Air Liquide SA 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 Air Liquide i.e., Air Liquide and Uber Technologies go up and down completely randomly.

Pair Corralation between Air Liquide and Uber Technologies

Assuming the 90 days horizon Air Liquide SA is expected to generate 0.45 times more return on investment than Uber Technologies. However, Air Liquide SA is 2.21 times less risky than Uber Technologies. It trades about 0.47 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.02 per unit of risk. If you would invest  2,532  in Air Liquide SA on September 4, 2022 and sell it today you would earn a total of  420.00  from holding Air Liquide SA or generate 16.59% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy95.45%
ValuesDaily Returns

Air Liquide SA  vs.  Uber Technologies

 Performance (%) 
       Timeline  
Air Liquide SA 
AIQUY Performance
12 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Air Liquide SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, Air Liquide showed solid returns over the last few months and may actually be approaching a breakup point.

AIQUY Price Channel

Uber Technologies 
Uber Technologies Performance
1 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable technical and fundamental indicators, Uber Technologies is not utilizing all of its potentials. The newest stock price agitation, may contribute to short-term losses for the retail investors.

Uber Technologies Price Channel

Air Liquide and Uber Technologies Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Air Liquide and Uber Technologies

The main advantage of trading using opposite Air Liquide and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Air Liquide 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.
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The idea behind Air Liquide SA 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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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 Probability Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.

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