Correlation Between Uber Technologies and NXP Semiconductors

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

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

Diversification Opportunities for Uber Technologies and NXP Semiconductors

0.6

Correlation Coefficient

Uber Technologies  NXP Semiconductors

Poor diversification

The 3 months correlation between Uber and NXP is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding Uber Technologies and NXP Semiconductors NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NXP Semiconductors 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 NXP Semiconductors. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NXP Semiconductors has no effect on the direction of Uber Technologies i.e., Uber Technologies and NXP Semiconductors go up and down completely randomly.

Pair Corralation between Uber Technologies and NXP Semiconductors

Assuming the 90 days horizon Uber Technologies is expected to generate 1.04 times more return on investment than NXP Semiconductors. However, Uber Technologies is 1.04 times more volatile than NXP Semiconductors NV. It trades about 0.08 of its potential returns per unit of risk. NXP Semiconductors NV is currently generating about 0.07 per unit of risk. If you would invest  6,918  in Uber Technologies on April 25, 2025 and sell it today you would earn a total of  738.00  from holding Uber Technologies or generate 10.67% return on investment over 90 days.

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

Uber Technologies  vs.  NXP Semiconductors NV

Uber Technologies

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Uber Technologies are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Uber Technologies may actually be approaching a critical reversion point that can send shares even higher in August 2025.

NXP Semiconductors

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in NXP Semiconductors NV are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile basic indicators, NXP Semiconductors may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with Uber Technologies and NXP Semiconductors

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

The idea behind Uber Technologies and NXP Semiconductors NV 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.