Correlation Between Upstart Holdings and Scentre
Can any of the company-specific risk be diversified away by investing in both Upstart Holdings and Scentre 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 Scentre into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upstart Holdings and Scentre Group, you can compare the effects of market volatilities on Upstart Holdings and Scentre 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 Scentre. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and Scentre.
Diversification Opportunities for Upstart Holdings and Scentre
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Upstart and Scentre is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and Scentre Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scentre Group 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 Scentre. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scentre Group has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and Scentre go up and down completely randomly.
Pair Corralation between Upstart Holdings and Scentre
Given the investment horizon of 90 days Upstart Holdings is expected to generate 3.24 times more return on investment than Scentre. However, Upstart Holdings is 3.24 times more volatile than Scentre Group. It trades about -0.04 of its potential returns per unit of risk. Scentre Group is currently generating about -0.24 per unit of risk. If you would invest 6,851 in Upstart Holdings on October 25, 2024 and sell it today you would lose (296.00) from holding Upstart Holdings or give up 4.32% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Upstart Holdings vs. Scentre Group
Performance |
| Timeline |
| Upstart Holdings |
| Scentre Group |
Upstart Holdings and Scentre Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Upstart Holdings and Scentre
The main advantage of trading using opposite Upstart Holdings and Scentre positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings position performs unexpectedly, Scentre 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 Scentre will offset losses from the drop in Scentre's long position.| Upstart Holdings vs. SoFi Technologies | Upstart Holdings vs. Visa Class A | Upstart Holdings vs. Mastercard | Upstart Holdings vs. American Express |
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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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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