Correlation Between Upstart Holdings and Enova International
Can any of the company-specific risk be diversified away by investing in both Upstart Holdings and Enova International 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 Enova International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upstart Holdings and Enova International, you can compare the effects of market volatilities on Upstart Holdings and Enova International 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 Enova International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and Enova International.
Diversification Opportunities for Upstart Holdings and Enova International
0.96 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Upstart and Enova is 0.96. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and Enova International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enova International 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 Enova International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enova International has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and Enova International go up and down completely randomly.
Pair Corralation between Upstart Holdings and Enova International
Given the investment horizon of 90 days Upstart Holdings is expected to generate 3.03 times more return on investment than Enova International. However, Upstart Holdings is 3.03 times more volatile than Enova International. It trades about 0.07 of its potential returns per unit of risk. Enova International is currently generating about 0.13 per unit of risk. If you would invest 4,731 in Upstart Holdings on September 14, 2024 and sell it today you would earn a total of 4,034 from holding Upstart Holdings or generate 85.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Upstart Holdings vs. Enova International
Performance |
| Timeline |
| Upstart Holdings |
| Enova International |
Upstart Holdings and Enova International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Upstart Holdings and Enova International
The main advantage of trading using opposite Upstart Holdings and Enova International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings position performs unexpectedly, Enova International 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 Enova International will offset losses from the drop in Enova International's long position.| Upstart Holdings vs. SoFi Technologies | Upstart Holdings vs. Visa Class A | Upstart Holdings vs. Mastercard | Upstart Holdings vs. American Express |
| Enova International vs. Visa Class A | Enova International vs. PayPal Holdings | Enova International vs. Upstart Holdings | Enova International 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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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