Correlation Between Upstart Holdings and SLM Corp
Can any of the company-specific risk be diversified away by investing in both Upstart Holdings and SLM Corp 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 SLM Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upstart Holdings and SLM Corp, you can compare the effects of market volatilities on Upstart Holdings and SLM Corp 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 SLM Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and SLM Corp.
Diversification Opportunities for Upstart Holdings and SLM Corp
0.16 | Correlation Coefficient |
Average diversification
The 3 months correlation between Upstart and SLM is 0.16. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and SLM Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SLM 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 SLM Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SLM Corp has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and SLM Corp go up and down completely randomly.
Pair Corralation between Upstart Holdings and SLM Corp
Given the investment horizon of 90 days Upstart Holdings is expected to under-perform the SLM Corp. In addition to that, Upstart Holdings is 3.36 times more volatile than SLM Corp. It trades about -0.03 of its total potential returns per unit of risk. SLM Corp is currently generating about 0.09 per unit of volatility. If you would invest 2,671 in SLM Corp on December 4, 2024 and sell it today you would earn a total of 255.00 from holding SLM Corp or generate 9.55% 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. SLM Corp
Performance |
Timeline |
Upstart Holdings |
SLM Corp |
Upstart Holdings and SLM Corp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Upstart Holdings and SLM Corp
The main advantage of trading using opposite Upstart Holdings and SLM Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings position performs unexpectedly, SLM Corp 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 SLM Corp will offset losses from the drop in SLM Corp'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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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