Correlation Between Upstart Holdings and Mastercard
Can any of the company-specific risk be diversified away by investing in both Upstart Holdings and Mastercard 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 Mastercard into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upstart Holdings and Mastercard, you can compare the effects of market volatilities on Upstart Holdings and Mastercard 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 Mastercard. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and Mastercard.
Diversification Opportunities for Upstart Holdings and Mastercard
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Upstart and Mastercard is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and Mastercard in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mastercard 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 Mastercard. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mastercard has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and Mastercard go up and down completely randomly.
Pair Corralation between Upstart Holdings and Mastercard
Given the investment horizon of 90 days Upstart Holdings is expected to generate 2.66 times more return on investment than Mastercard. However, Upstart Holdings is 2.66 times more volatile than Mastercard. It trades about 0.1 of its potential returns per unit of risk. Mastercard is currently generating about 0.23 per unit of risk. If you would invest 6,080 in Upstart Holdings on November 3, 2024 and sell it today you would earn a total of 395.00 from holding Upstart Holdings or generate 6.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Upstart Holdings vs. Mastercard
Performance |
| Timeline |
| Upstart Holdings |
| Mastercard |
Upstart Holdings and Mastercard Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Upstart Holdings and Mastercard
The main advantage of trading using opposite Upstart Holdings and Mastercard positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings position performs unexpectedly, Mastercard 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 Mastercard will offset losses from the drop in Mastercard's long position.| Upstart Holdings vs. SoFi Technologies | Upstart Holdings vs. Visa Class A | Upstart Holdings vs. Mastercard | Upstart Holdings vs. American Express |
| Mastercard vs. American Express | Mastercard vs. PayPal Holdings | Mastercard vs. Upstart Holdings | Mastercard vs. Capital One Financial |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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