Correlation Between Upstart Holdings and Gabelli Healthcare

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

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

Diversification Opportunities for Upstart Holdings and Gabelli Healthcare

-0.81

Correlation Coefficient

Upstart Holdings  Gabelli Healthcare

Pay attention - limited upside

The 3 months correlation between Upstart and Gabelli is -0.81. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and Gabelli Healthcare WellnessRx in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gabelli Healthcare 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 Gabelli Healthcare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gabelli Healthcare has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and Gabelli Healthcare go up and down completely randomly.

Pair Corralation between Upstart Holdings and Gabelli Healthcare

Given the investment horizon of 90 days Upstart Holdings is expected to generate 11.58 times more return on investment than Gabelli Healthcare. However, Upstart Holdings is 11.58 times more volatile than Gabelli Healthcare WellnessRx. It trades about 0.2 of its potential returns per unit of risk. Gabelli Healthcare WellnessRx is currently generating about 0.05 per unit of risk. If you would invest  4,724  in Upstart Holdings on September 4, 2024 and sell it today you would earn a total of  2,015  from holding Upstart Holdings or generate 42.65% return on investment over 90 days.

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

Upstart Holdings  vs.  Gabelli Healthcare WellnessRx

Upstart Holdings

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Upstart Holdings are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating basic indicators, Upstart Holdings unveiled solid returns over the last few months and may actually be approaching a breakup point.

Gabelli Healthcare

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Upstart Holdings and Gabelli Healthcare

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

The idea behind Upstart Holdings and Gabelli Healthcare WellnessRx 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.