Correlation Between Upstart Holdings and Affirm Holdings
Can any of the company-specific risk be diversified away by investing in both Upstart Holdings and Affirm 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 Upstart Holdings and Affirm Holdings into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upstart Holdings and Affirm Holdings, you can compare the effects of market volatilities on Upstart Holdings and Affirm 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 Upstart Holdings with a short position of Affirm Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and Affirm Holdings.
Diversification Opportunities for Upstart Holdings and Affirm Holdings
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Upstart and Affirm is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and Affirm Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Affirm Holdings and Upstart Holdings 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 Upstart Holdings are associated (or correlated) with Affirm Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Affirm Holdings has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and Affirm Holdings go up and down completely randomly.
Pair Corralation between Upstart Holdings and Affirm Holdings
Given the investment horizon of 90 days Upstart Holdings is expected to generate 1.03 times less return on investment than Affirm Holdings. In addition to that, Upstart Holdings is 1.68 times more volatile than Affirm Holdings. It trades about 0.23 of its total potential returns per unit of risk. Affirm Holdings is currently generating about 0.4 per unit of volatility. If you would invest 4,212 in Affirm Holdings on August 28, 2024 and sell it today you would earn a total of 2,723 from holding Affirm Holdings or generate 64.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Upstart Holdings vs. Affirm Holdings
Performance |
| Timeline |
| Upstart Holdings |
| Affirm Holdings |
Upstart Holdings and Affirm Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Upstart Holdings and Affirm Holdings
The main advantage of trading using opposite Upstart Holdings and Affirm Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings position performs unexpectedly, Affirm 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 Affirm Holdings will offset losses from the drop in Affirm Holdings' long position.| Upstart Holdings vs. SoFi Technologies | Upstart Holdings vs. Visa Class A | Upstart Holdings vs. Mastercard | Upstart Holdings vs. American Express |
| Affirm Holdings vs. Upstart Holdings | Affirm Holdings vs. SoFi Technologies | Affirm Holdings vs. Roblox Corp | Affirm Holdings vs. Robinhood Markets |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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