Correlation Between Uber Technologies and Exxon

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

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

Diversification Opportunities for Uber Technologies and Exxon

0.08
  Correlation Coefficient
Uber Technologies
Exxon Mobil Corp

Significant diversification

The 24 months correlation between Uber Technologies and Exxon is 0.08. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and Exxon Mobil Corp in the same portfolio assuming nothing else is changed. The correlation between historical prices or returns on Exxon Mobil Corp 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 Exxon. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Exxon Mobil Corp has no effect on the direction of Uber Technologies i.e., Uber Technologies and Exxon go up and down completely randomly.

Pair Corralation between Uber Technologies and Exxon

Given the investment horizon of 90 days Uber Technologies is expected to generate 1.08 times less return on investment than Exxon. In addition to that, Uber Technologies is 1.66 times more volatile than Exxon Mobil Corp. It trades about 0.12 of its total potential returns per unit of risk. Exxon Mobil Corp is currently generating about 0.22 per unit of volatility. If you would invest  5,577  in Exxon Mobil Corp on July 28, 2021 and sell it today you would earn a total of  858.00  from holding Exxon Mobil Corp or generate 15.38% return on investment over 90 days.
Time Period24 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy100.0%
ValuesDaily Returns

Uber Technologies  vs.  Exxon Mobil Corp

 Performance (%) 
      Timeline 
Uber Technologies 
 Uber Technologies Performance
3 of 100
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 sluggish technical and fundamental indicators, Uber Technologies may actually be approaching a critical reversion point that can send shares even higher in November 2021.

Uber Technologies Price Channel

Exxon Mobil Corp 
 Exxon Performance
0 of 100
Over the last 90 days Exxon Mobil Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively steady basic indicators, Exxon is not utilizing all of its potentials. The recent stock price chaos, may contribute to medium-term losses for the stakeholders.

Exxon Price Channel

Uber Technologies and Exxon Volatility Contrast

 Predicted Return Density 
      Returns 

Pair Trading with Uber Technologies and Exxon

The main advantage of trading using opposite Uber Technologies and Exxon positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Uber Technologies position performs unexpectedly, Exxon 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 Exxon will offset losses from the drop in Exxon's long position.
The idea behind Uber Technologies and Exxon Mobil Corp 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.

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