Correlation Between Upstart Holdings and SoFi Technologies
Can any of the company-specific risk be diversified away by investing in both Upstart Holdings and SoFi Technologies 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 SoFi Technologies into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upstart Holdings and SoFi Technologies, you can compare the effects of market volatilities on Upstart Holdings and SoFi Technologies 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 SoFi Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and SoFi Technologies.
Diversification Opportunities for Upstart Holdings and SoFi Technologies
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Upstart and SoFi is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and SoFi Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SoFi Technologies 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 SoFi Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SoFi Technologies has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and SoFi Technologies go up and down completely randomly.
Pair Corralation between Upstart Holdings and SoFi Technologies
Given the investment horizon of 90 days Upstart Holdings is expected to generate 1.79 times more return on investment than SoFi Technologies. However, Upstart Holdings is 1.79 times more volatile than SoFi Technologies. It trades about 0.07 of its potential returns per unit of risk. SoFi Technologies is currently generating about 0.1 per unit of risk. If you would invest 3,242 in Upstart Holdings on November 3, 2024 and sell it today you would earn a total of 3,233 from holding Upstart Holdings or generate 99.72% 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. SoFi Technologies
Performance |
| Timeline |
| Upstart Holdings |
| SoFi Technologies |
Upstart Holdings and SoFi Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Upstart Holdings and SoFi Technologies
The main advantage of trading using opposite Upstart Holdings and SoFi Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings position performs unexpectedly, SoFi Technologies 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 SoFi Technologies will offset losses from the drop in SoFi Technologies' long position.| Upstart Holdings vs. SoFi Technologies | Upstart Holdings vs. Visa Class A | Upstart Holdings vs. Mastercard | Upstart Holdings vs. American Express |
| SoFi Technologies vs. Upstart Holdings | SoFi Technologies vs. Affirm Holdings | SoFi Technologies vs. Lucid Group | SoFi Technologies vs. Palantir Technologies Class |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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