Correlation Between Uber Technologies and Agilysys

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

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

Diversification Opportunities for Uber Technologies and Agilysys

-0.44

Correlation Coefficient

Uber Technologies  Agilysys

Very good diversification

The 3 months correlation between Uber and Agilysys is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Agilysys in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agilysys 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 Agilysys. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agilysys has no effect on the direction of Uber Technologies i.e., Uber Technologies and Agilysys go up and down completely randomly.

Pair Corralation between Uber Technologies and Agilysys

Given the investment horizon of 90 days Uber Technologies is expected to under-perform the Agilysys. But the stock apears to be less risky and, when comparing its historical volatility, Uber Technologies is 1.07 times less risky than Agilysys. The stock trades about -0.27 of its potential returns per unit of risk. The Agilysys is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  7,912  in Agilysys on January 20, 2024 and sell it today you would earn a total of  263.00  from holding Agilysys or generate 3.32% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	95.45%
Values	Daily Returns

Uber Technologies  vs.  Agilysys

Uber Technologies

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies are ranked lower than 5 (%) 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.

Agilysys

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agilysys has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Agilysys is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Uber Technologies and Agilysys

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

The idea behind Uber Technologies and Agilysys 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 the Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..