Correlation Between Microsoft Corp and Uber Technologies

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

Specify exactly 2 symbols:

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

Diversification Opportunities for Microsoft Corp and Uber Technologies

-0.19
  Correlation Coefficient
Microsoft Corp
Uber Technologies

Good diversification

The 3 months correlation between Microsoft and Uber Technologies is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding Microsoft Corp and Uber Technologies in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Microsoft Corp 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 Microsoft Corp 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 Microsoft Corp i.e., Microsoft Corp and Uber Technologies go up and down completely randomly.

Pair Corralation between Microsoft Corp and Uber Technologies

Given the investment horizon of 90 days Microsoft Corp is expected to generate 0.44 times more return on investment than Uber Technologies. However, Microsoft Corp is 2.25 times less risky than Uber Technologies. It trades about 0.14 of its potential returns per unit of risk. Uber Technologies is currently generating about 0.05 per unit of risk. If you would invest  20,233  in Microsoft Corp on July 28, 2021 and sell it today you would earn a total of  10,808  from holding Microsoft Corp or generate 53.42% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Microsoft Corp  vs.  Uber Technologies

 Performance (%) 
      Timeline 
Microsoft Corp 
 Microsoft Performance
8 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Microsoft Corp are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak technical and fundamental indicators, Microsoft Corp may actually be approaching a critical reversion point that can send shares even higher in November 2021.

Microsoft Price Channel

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 relatively invariable technical and fundamental indicators, Uber Technologies is not utilizing all of its potentials. The new stock price agitation, may contribute to short-term losses for the retail investors.

Uber Technologies Price Channel

Microsoft Corp and Uber Technologies Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Microsoft Corp and Uber Technologies

The main advantage of trading using opposite Microsoft Corp and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Microsoft Corp 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 Microsoft Corp 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.
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.

Other Complementary Tools

Watchlist Optimization
Optimize watchlists to build efficient portfolio or rebalance existing positions based on mean-variance optimization algorithm
Go
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Go
Global Correlations
Find global opportunities by holding instruments from different markets
Go
Equity Analysis
Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities
Go
Pair Correlation
Compare performance and examine fundamental relationship between any two equity instruments
Go
Companies Directory
Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals
Go
Balance Of Power
Check stock momentum by analyzing Balance Of Power indicator and other technical ratios
Go
Financial Widgets
Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets
Go
Risk-Return Analysis
View associations between returns expected from investment and the risk you assume
Go
Crypto Correlations
Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins
Go
Pattern Recognition
Use different Pattern Recognition models to time the market across multiple global exchanges
Go