Correlation Between Upstart Holdings and Pinterest
Can any of the company-specific risk be diversified away by investing in both Upstart Holdings and Pinterest 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 Pinterest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upstart Holdings and Pinterest, you can compare the effects of market volatilities on Upstart Holdings and Pinterest 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 Pinterest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and Pinterest.
Diversification Opportunities for Upstart Holdings and Pinterest
-0.2 | Correlation Coefficient |
Good diversification
The 3 months correlation between Upstart and Pinterest is -0.2. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and Pinterest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Pinterest 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 Pinterest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Pinterest has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and Pinterest go up and down completely randomly.
Pair Corralation between Upstart Holdings and Pinterest
Given the investment horizon of 90 days Upstart Holdings is expected to generate 2.86 times more return on investment than Pinterest. However, Upstart Holdings is 2.86 times more volatile than Pinterest. It trades about 0.23 of its potential returns per unit of risk. Pinterest is currently generating about -0.06 per unit of risk. If you would invest 5,042 in Upstart Holdings on August 30, 2024 and sell it today you would earn a total of 2,801 from holding Upstart Holdings or generate 55.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Upstart Holdings vs. Pinterest
Performance |
| Timeline |
| Upstart Holdings |
Upstart Holdings and Pinterest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Upstart Holdings and Pinterest
The main advantage of trading using opposite Upstart Holdings and Pinterest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings position performs unexpectedly, Pinterest 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 Pinterest will offset losses from the drop in Pinterest's long position.| Upstart Holdings vs. SoFi Technologies | Upstart Holdings vs. Visa Class A | Upstart Holdings vs. Mastercard | Upstart Holdings vs. American Express |
| Pinterest vs. Twilio Inc | Pinterest vs. Meta Platforms | Pinterest vs. Alphabet Inc Class C | Pinterest vs. Alphabet Inc Class A |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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