Correlation Between Uber Technologies and Ajinomoto

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

Diversification Opportunities for Uber Technologies and Ajinomoto

0.73
  Correlation Coefficient

Poor diversification

The 13 months correlation between Uber Technologies and Ajinomoto is 0.73. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Ajinomoto Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ajinomoto 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 Ajinomoto. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ajinomoto has no effect on the direction of Uber Technologies i.e., Uber Technologies and Ajinomoto go up and down completely randomly.

Pair Corralation between Uber Technologies and Ajinomoto

Given the investment horizon of 90 days Uber Technologies is expected to under-perform the Ajinomoto. In addition to that, Uber Technologies is 2.15 times more volatile than Ajinomoto Co. It trades about -0.02 of its total potential returns per unit of risk. Ajinomoto Co is currently generating about 0.05 per unit of volatility. If you would invest  2,035  in Ajinomoto Co on August 31, 2022 and sell it today you would earn a total of  893.00  from holding Ajinomoto Co or generate 43.88% return on investment over 90 days.
Time Period13 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Uber Technologies  vs.  Ajinomoto Co

 Performance (%) 
       Timeline  
Uber Technologies 
Uber Technologies Performance
0 of 100
Over the last 90 days Uber Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Even with latest sluggish performance, the Stock's technical and fundamental indicators remain invariable and the latest agitation on Wall Street may also be a sign of long-running gains for the enterprise retail investors.

Uber Technologies Price Channel

Ajinomoto 
Ajinomoto Performance
0 of 100
Over the last 90 days Ajinomoto Co has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Ajinomoto is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Ajinomoto Price Channel

Uber Technologies and Ajinomoto Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Uber Technologies and Ajinomoto

The main advantage of trading using opposite Uber Technologies and Ajinomoto positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Ajinomoto 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 Ajinomoto will offset losses from the drop in Ajinomoto's long position.
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The idea behind Uber Technologies and Ajinomoto Co 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .

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