Correlation Between Upstart Holdings and Roth CH

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

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

Diversification Opportunities for Upstart Holdings and Roth CH

-0.61

Correlation Coefficient

Upstart Holdings  Roth CH

Excellent diversification

The 3 months correlation between Upstart and Roth is -0.61. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and Roth CH Acquisition in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roth CH Acquisition 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 Roth CH. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roth CH Acquisition has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and Roth CH go up and down completely randomly.

Pair Corralation between Upstart Holdings and Roth CH

Given the investment horizon of 90 days Upstart Holdings is expected to generate 5.42 times more return on investment than Roth CH. However, Upstart Holdings is 5.42 times more volatile than Roth CH Acquisition. It trades about -0.02 of its potential returns per unit of risk. Roth CH Acquisition is currently generating about -0.15 per unit of risk. If you would invest  7,748  in Upstart Holdings on September 12, 2024 and sell it today you would lose (346.00) from holding Upstart Holdings or give up 4.47% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	95.24%
Values	Daily Returns

Upstart Holdings  vs.  Roth CH Acquisition

Upstart Holdings

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Upstart Holdings are ranked lower than 14 (%) 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.

Roth CH Acquisition

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Roth CH Acquisition has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable essential indicators, Roth CH is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Upstart Holdings and Roth CH

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

The idea behind Upstart Holdings and Roth CH Acquisition 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.