Correlation Between AnnexonInc and Uber Technologies

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

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

Diversification Opportunities for AnnexonInc and Uber Technologies

0.61

Correlation Coefficient

AnnexonInc  Uber Technologies

Poor diversification

The 3 months correlation between AnnexonInc and Uber is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding AnnexonInc and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and AnnexonInc 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 AnnexonInc 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 AnnexonInc i.e., AnnexonInc and Uber Technologies go up and down completely randomly.

Pair Corralation between AnnexonInc and Uber Technologies

Given the investment horizon of 90 days AnnexonInc is expected to generate 2.11 times more return on investment than Uber Technologies. However, AnnexonInc is 2.11 times more volatile than Uber Technologies. It trades about 0.05 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.08 per unit of risk. If you would invest  260.00  in AnnexonInc on January 26, 2024 and sell it today you would earn a total of  185.00  from holding AnnexonInc or generate 71.15% return on investment over 90 days.

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

AnnexonInc  vs.  Uber Technologies

AnnexonInc

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in AnnexonInc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak basic indicators, AnnexonInc showed solid returns over the last few months and may actually be approaching a breakup point.

Uber Technologies

Risk-Adjusted Performance

3 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Even with relatively unfluctuating technical and fundamental indicators, Uber Technologies may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with AnnexonInc and Uber Technologies

The main advantage of trading using opposite AnnexonInc and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AnnexonInc 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.

The idea behind AnnexonInc 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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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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.