Correlation Between Upstart Holdings and Senmiao Technology
Can any of the company-specific risk be diversified away by investing in both Upstart Holdings and Senmiao Technology 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 Senmiao Technology into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upstart Holdings and Senmiao Technology, you can compare the effects of market volatilities on Upstart Holdings and Senmiao Technology 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 Senmiao Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and Senmiao Technology.
Diversification Opportunities for Upstart Holdings and Senmiao Technology
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Upstart and Senmiao is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and Senmiao Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Senmiao Technology 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 Senmiao Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Senmiao Technology has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and Senmiao Technology go up and down completely randomly.
Pair Corralation between Upstart Holdings and Senmiao Technology
Given the investment horizon of 90 days Upstart Holdings is expected to generate 1.13 times more return on investment than Senmiao Technology. However, Upstart Holdings is 1.13 times more volatile than Senmiao Technology. It trades about 0.15 of its potential returns per unit of risk. Senmiao Technology is currently generating about -0.04 per unit of risk. If you would invest 6,943 in Upstart Holdings on September 13, 2024 and sell it today you would earn a total of 897.00 from holding Upstart Holdings or generate 12.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Upstart Holdings vs. Senmiao Technology
Performance |
| Timeline |
| Upstart Holdings |
| Senmiao Technology |
Upstart Holdings and Senmiao Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Upstart Holdings and Senmiao Technology
The main advantage of trading using opposite Upstart Holdings and Senmiao Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings position performs unexpectedly, Senmiao Technology 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 Senmiao Technology will offset losses from the drop in Senmiao Technology's long position.| Upstart Holdings vs. SoFi Technologies | Upstart Holdings vs. Visa Class A | Upstart Holdings vs. Mastercard | Upstart Holdings vs. American Express |
| Senmiao Technology vs. Visa Class A | Senmiao Technology vs. PayPal Holdings | Senmiao Technology vs. Upstart Holdings | Senmiao Technology vs. Mastercard |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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