Correlation Between Snowflake and Upstart Holdings
Can any of the company-specific risk be diversified away by investing in both Snowflake and Upstart Holdings 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 Snowflake and Upstart Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Snowflake and Upstart Holdings, you can compare the effects of market volatilities on Snowflake and Upstart Holdings 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 Snowflake with a short position of Upstart Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Snowflake and Upstart Holdings.
Diversification Opportunities for Snowflake and Upstart Holdings
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Snowflake and Upstart is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Snowflake and Upstart Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upstart Holdings and Snowflake 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 Snowflake are associated (or correlated) with Upstart Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upstart Holdings has no effect on the direction of Snowflake i.e., Snowflake and Upstart Holdings go up and down completely randomly.
Pair Corralation between Snowflake and Upstart Holdings
Given the investment horizon of 90 days Snowflake is expected to generate 0.63 times more return on investment than Upstart Holdings. However, Snowflake is 1.58 times less risky than Upstart Holdings. It trades about 0.35 of its potential returns per unit of risk. Upstart Holdings is currently generating about 0.16 per unit of risk. If you would invest 16,103 in Snowflake on November 9, 2024 and sell it today you would earn a total of 2,534 from holding Snowflake or generate 15.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Snowflake vs. Upstart Holdings
Performance |
| Timeline |
| Snowflake |
| Upstart Holdings |
Snowflake and Upstart Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Snowflake and Upstart Holdings
The main advantage of trading using opposite Snowflake and Upstart Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Snowflake position performs unexpectedly, Upstart Holdings 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 Upstart Holdings will offset losses from the drop in Upstart Holdings' long position.The idea behind Snowflake and Upstart Holdings 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.| Upstart Holdings vs. Visa Class A | Upstart Holdings vs. Great Western Minerals | Upstart Holdings vs. Enterprise Bancorp | Upstart Holdings vs. T Rowe Price |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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