# Correlation Between Uber Technologies and Vertex Energy

Can any of the company-specific risk be diversified away by investing in both Uber Technologies and Vertex Energy 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 Vertex Energy into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Uber Technologies and Vertex Energy, you can compare the effects of market volatilities on Uber Technologies and Vertex Energy 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 Vertex Energy. Check out your portfolio center. Please also check ongoing floating volatility patterns of Uber Technologies and Vertex Energy.

## Diversification Opportunities for Uber Technologies and Vertex Energy

-0.31 | Correlation Coefficient |

### Very good diversification

The 3 months correlation between Uber Technologies and Vertex is

**-0.31**. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Vertex Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vertex Energy 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 Vertex Energy. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vertex Energy has no effect on the direction of Uber Technologies i.e., Uber Technologies and Vertex Energy go up and down completely randomly.## Pair Corralation between Uber Technologies and Vertex Energy

Given the investment horizon of 90 days Uber Technologies is expected to under-perform the Vertex Energy. But the stock apears to be less risky and, when comparing its historical volatility, Uber Technologies is 3.06 times less risky than Vertex Energy. The stock trades about -0.03 of its potential returns per unit of risk. The Vertex Energy is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest

**175.00**in Vertex Energy on**May 20, 2022**and sell it today you would**earn a total of 537.00**from holding Vertex Energy or generate**306.86%**return on investment over**90**days.Time Period | 3 Months [change] |

Direction | Moves Against |

Strength | Insignificant |

Accuracy | 100.0% |

Values | Daily Returns |

## Uber Technologies vs. Vertex Energy

Performance (%) |

Timeline |

Uber Technologies |

Uber Technologies Performance

9 of 100

### Uber Technologies Price Channel

Vertex Energy |

## Uber Technologies and Vertex Energy Volatility Contrast

Predicted Return Density |

Returns |

## Pair Trading with Uber Technologies and Vertex Energy

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

### Pair trading matchups for Uber Technologies

The effect of pair diversification on risk is to reduce it, but we should note this doesn't apply to all risk types. When we trade pairs against Uber Technologies as a counterpart, there is always some inherent risk that will never be diversified away no matter what. This volatility limits the effect of tactical diversification using pair trading. Uber Technologies' systematic risk is the inherent uncertainty of the entire market, and therefore cannot be mitigated even by pair-trading it against the equity that is not highly correlated to it. On the other hand, Uber Technologies' unsystematic risk describes the types of risk that we can protect against, at least to some degree, by selecting a matching pair that is not perfectly correlated to Uber Technologies.

## Vertex Energy

### Pair trading matchups for Vertex Energy

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.

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