Correlation Between HOME DEPOT and Upstart Investments

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

By analyzing existing cross correlation between HOME DEPOT CDR and Upstart Investments, you can compare the effects of market volatilities on HOME DEPOT and Upstart Investments 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 HOME DEPOT with a short position of Upstart Investments. Check out your portfolio center. Please also check ongoing floating volatility patterns of HOME DEPOT and Upstart Investments.

Diversification Opportunities for HOME DEPOT and Upstart Investments

0.0

Correlation Coefficient

HOME DEPOT  Upstart Investments

Pay attention - limited upside

The 3 months correlation between HOME and Upstart is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding HOME DEPOT CDR and Upstart Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upstart Investments and HOME DEPOT 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 HOME DEPOT CDR are associated (or correlated) with Upstart Investments. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upstart Investments has no effect on the direction of HOME DEPOT i.e., HOME DEPOT and Upstart Investments go up and down completely randomly.

Pair Corralation between HOME DEPOT and Upstart Investments

If you would invest  6.00  in Upstart Investments on December 21, 2024 and sell it today you would earn a total of  0.00  from holding Upstart Investments or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

HOME DEPOT CDR  vs.  Upstart Investments

HOME DEPOT CDR

Risk-Adjusted Performance

Very Weak

Over the last 90 days HOME DEPOT CDR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Upstart Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Upstart Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Upstart Investments is not utilizing all of its potentials. The latest stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with HOME DEPOT and Upstart Investments

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

The idea behind HOME DEPOT CDR and Upstart Investments 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.