Correlation Between Eventbrite and Uber Technologies

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

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

Diversification Opportunities for Eventbrite and Uber Technologies

-0.18

Correlation Coefficient

Eventbrite  Uber Technologies

Good diversification

The 3 months correlation between Eventbrite and Uber is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Eventbrite Class A and Uber Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uber Technologies and Eventbrite 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 Eventbrite Class A 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 Eventbrite i.e., Eventbrite and Uber Technologies go up and down completely randomly.

Pair Corralation between Eventbrite and Uber Technologies

Allowing for the 90-day total investment horizon Eventbrite Class A is expected to generate 1.32 times more return on investment than Uber Technologies. However, Eventbrite is 1.32 times more volatile than Uber Technologies. It trades about 0.01 of its potential returns per unit of risk. Uber Technologies is currently generating about -0.2 per unit of risk. If you would invest  557.00  in Eventbrite Class A on February 4, 2024 and sell it today you would lose (2.00) from holding Eventbrite Class A or give up 0.36% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	95.65%
Values	Daily Returns

Eventbrite Class A  vs.  Uber Technologies

Eventbrite Class A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eventbrite Class A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in June 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Uber Technologies

Risk-Adjusted Performance

0 of 100

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 Eventbrite and Uber Technologies

The main advantage of trading using opposite Eventbrite and Uber Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eventbrite 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 Eventbrite Class A 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.