Correlation Between Upstart Holdings and Medallion Financial
Can any of the company-specific risk be diversified away by investing in both Upstart Holdings and Medallion Financial 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 Medallion Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upstart Holdings and Medallion Financial Corp, you can compare the effects of market volatilities on Upstart Holdings and Medallion Financial 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 Medallion Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and Medallion Financial.
Diversification Opportunities for Upstart Holdings and Medallion Financial
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Upstart and Medallion is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and Medallion Financial Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Medallion Financial Corp 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 Medallion Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Medallion Financial Corp has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and Medallion Financial go up and down completely randomly.
Pair Corralation between Upstart Holdings and Medallion Financial
Given the investment horizon of 90 days Upstart Holdings is expected to generate 2.51 times more return on investment than Medallion Financial. However, Upstart Holdings is 2.51 times more volatile than Medallion Financial Corp. It trades about 0.08 of its potential returns per unit of risk. Medallion Financial Corp is currently generating about 0.02 per unit of risk. If you would invest 2,112 in Upstart Holdings on December 3, 2024 and sell it today you would earn a total of 4,057 from holding Upstart Holdings or generate 192.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Upstart Holdings vs. Medallion Financial Corp
Performance |
Timeline |
Upstart Holdings |
Medallion Financial Corp |
Upstart Holdings and Medallion Financial Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Upstart Holdings and Medallion Financial
The main advantage of trading using opposite Upstart Holdings and Medallion Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings position performs unexpectedly, Medallion Financial 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 Medallion Financial will offset losses from the drop in Medallion Financial'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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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