Correlation Between Uber Technologies and Autodesk

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

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

Diversification Opportunities for Uber Technologies and Autodesk

0.28

Correlation Coefficient

Uber Technologies  Autodesk

Modest diversification

The 3 months correlation between Uber and Autodesk is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Autodesk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autodesk 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 Autodesk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autodesk has no effect on the direction of Uber Technologies i.e., Uber Technologies and Autodesk go up and down completely randomly.

Pair Corralation between Uber Technologies and Autodesk

Given the investment horizon of 90 days Uber Technologies is expected to generate 0.92 times more return on investment than Autodesk. However, Uber Technologies is 1.08 times less risky than Autodesk. It trades about -0.3 of its potential returns per unit of risk. Autodesk is currently generating about -0.47 per unit of risk. If you would invest  7,791  in Uber Technologies on January 26, 2024 and sell it today you would lose (855.00) from holding Uber Technologies or give up 10.97% of portfolio value over 90 days.

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

Uber Technologies  vs.  Autodesk

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.

Autodesk

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Autodesk has generated negative risk-adjusted returns adding no value to investors with long positions. Despite uncertain performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in May 2024. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Uber Technologies and Autodesk

The main advantage of trading using opposite Uber Technologies and Autodesk positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Autodesk 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 Autodesk will offset losses from the drop in Autodesk's long position.

The idea behind Uber Technologies and Autodesk 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.