Correlation Between Upstart Holdings and Eaton Vance

Can any of the company-specific risk be diversified away by investing in both Upstart Holdings and Eaton Vance 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 Eaton Vance into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Upstart Holdings and Eaton Vance Municipal, you can compare the effects of market volatilities on Upstart Holdings and Eaton Vance 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 Eaton Vance. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and Eaton Vance.

Diversification Opportunities for Upstart Holdings and Eaton Vance

-0.76

Correlation Coefficient

Upstart Holdings  Eaton Vance

Pay attention - limited upside

The 3 months correlation between Upstart and Eaton is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and Eaton Vance Municipal in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eaton Vance Municipal 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 Eaton Vance. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eaton Vance Municipal has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and Eaton Vance go up and down completely randomly.

Pair Corralation between Upstart Holdings and Eaton Vance

Given the investment horizon of 90 days Upstart Holdings is expected to generate 17.87 times more return on investment than Eaton Vance. However, Upstart Holdings is 17.87 times more volatile than Eaton Vance Municipal. It trades about 0.15 of its potential returns per unit of risk. Eaton Vance Municipal is currently generating about -0.11 per unit of risk. If you would invest  3,853  in Upstart Holdings on September 21, 2024 and sell it today you would earn a total of  2,870  from holding Upstart Holdings or generate 74.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Upstart Holdings  vs.  Eaton Vance Municipal

Upstart Holdings

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Upstart Holdings are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Upstart Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Eaton Vance Municipal

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eaton Vance Municipal has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong basic indicators, Eaton Vance is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Upstart Holdings and Eaton Vance

The main advantage of trading using opposite Upstart Holdings and Eaton Vance positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings position performs unexpectedly, Eaton Vance 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 Eaton Vance will offset losses from the drop in Eaton Vance's long position.

The idea behind Upstart Holdings and Eaton Vance Municipal pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.