Correlation Between Uber Technologies and Wesfarmers

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Wesfarmers 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 Wesfarmers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Wesfarmers, you can compare the effects of market volatilities on Uber Technologies and Wesfarmers 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 Wesfarmers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Wesfarmers.

Diversification Opportunities for Uber Technologies and Wesfarmers

0.65
  Correlation Coefficient

Poor diversification

The 3 months correlation between Uber Technologies and Wesfarmers is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Wesfarmers in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Wesfarmers 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 Wesfarmers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Wesfarmers has no effect on the direction of Uber Technologies i.e., Uber Technologies and Wesfarmers go up and down completely randomly.

Pair Corralation between Uber Technologies and Wesfarmers

Given the investment horizon of 90 days Uber Technologies is expected to generate 3.85 times less return on investment than Wesfarmers. In addition to that, Uber Technologies is 1.92 times more volatile than Wesfarmers. It trades about 0.05 of its total potential returns per unit of risk. Wesfarmers is currently generating about 0.33 per unit of volatility. If you would invest  1,427  in Wesfarmers on August 28, 2022 and sell it today you would earn a total of  245.00  from holding Wesfarmers or generate 17.17% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthSignificant
Accuracy100.0%
ValuesDaily Returns

Uber Technologies  vs.  Wesfarmers

 Performance (%) 
       Timeline  
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 latest stock price agitation, may contribute to short-term losses for the retail investors.

Uber Technologies Price Channel

Wesfarmers 
Wesfarmers Performance
3 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Wesfarmers are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong technical and fundamental indicators, Wesfarmers is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Wesfarmers Price Channel

Uber Technologies and Wesfarmers Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Uber Technologies and Wesfarmers

The main advantage of trading using opposite Uber Technologies and Wesfarmers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Wesfarmers 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 Wesfarmers will offset losses from the drop in Wesfarmers' long position.
Uber Technologies vs. Servicenow
Uber Technologies vs. Autodesk
Uber Technologies vs. Salesforce
Uber Technologies vs. Snowflake Inc Cl
The idea behind Uber Technologies and Wesfarmers 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.
Wesfarmers vs. Home Depot
Wesfarmers vs. Lowes Companies
Wesfarmers vs. Northrop Grumman Corp
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 Watchlist Optimization module to optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm.

Other Complementary Tools

Volatility Analysis
Get historical volatility and risk analysis based on latest market data
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Analyst Recommendations
Analyst recommendations and target price estimates broken down by several categories
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Headlines Timeline
Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go
Aroon Oscillator
Analyze current equity momentum using Aroon Oscillator and other momentum ratios
Go
Insider Screener
Find insiders across different sectors to evaluate their impact on performance
Go
Fundamentals Comparison
Compare fundamentals across multiple equities to find investing opportunities
Go
Options Analysis
Analyze and evaluate options and option chains as a potential hedge for your portfolios
Go