Correlation Between Atlassian Corp and Uber Technologies

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

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

Diversification Opportunities for Atlassian Corp and Uber Technologies

0.5

Correlation Coefficient

Atlassian Corp  Uber Technologies

Very weak diversification

The 3 months correlation between Atlassian and Uber is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding Atlassian Corp Plc and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Atlassian 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 Atlassian Corp Plc 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 Atlassian Corp i.e., Atlassian Corp and Uber Technologies go up and down completely randomly.

Pair Corralation between Atlassian Corp and Uber Technologies

Given the investment horizon of 90 days Atlassian Corp Plc is expected to under-perform the Uber Technologies. But the stock apears to be less risky and, when comparing its historical volatility, Atlassian Corp Plc is 1.04 times less risky than Uber Technologies. The stock trades about -0.1 of its potential returns per unit of risk. The Uber Technologies is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest  6,912  in Uber Technologies on February 11, 2024 and sell it today you would lose (213.00) from holding Uber Technologies or give up 3.08% of portfolio value over 90 days.

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

Atlassian Corp Plc  vs.  Uber Technologies

Atlassian Corp Plc

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Atlassian Corp Plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in June 2024. The recent disarray may also be a sign of long period up-swing for the firm investors.

Uber Technologies

Risk-Adjusted Performance

0 of 100

Very Weak

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 recent stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Atlassian Corp and Uber Technologies

The main advantage of trading using opposite Atlassian Corp and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Atlassian 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 Atlassian Corp Plc 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.