Correlation Between Upstart Holdings and Coca Cola

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Can any of the company-specific risk be diversified away by investing in both Upstart Holdings and Coca Cola 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 Coca Cola into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Upstart Holdings and Coca Cola Europacific, you can compare the effects of market volatilities on Upstart Holdings and Coca Cola 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 Coca Cola. Check out your portfolio center. Please also check ongoing floating volatility patterns of Upstart Holdings and Coca Cola.

Diversification Opportunities for Upstart Holdings and Coca Cola

-0.22
  Correlation Coefficient

Very good diversification

The 3 months correlation between Upstart and Coca Cola is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Upstart Holdings and Coca Cola Europacific Partners in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coca Cola Europacific 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 Coca Cola. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coca Cola Europacific has no effect on the direction of Upstart Holdings i.e., Upstart Holdings and Coca Cola go up and down completely randomly.

Pair Corralation between Upstart Holdings and Coca Cola

Given the investment horizon of 90 days Upstart Holdings is expected to generate 4.61 times more return on investment than Coca Cola. However, Upstart Holdings is 4.61 times more volatile than Coca Cola Europacific. It trades about 0.05 of its potential returns per unit of risk. Coca Cola Europacific is currently generating about 0.04 per unit of risk. If you would invest  2,000  in Upstart Holdings on May 9, 2022 and sell it today you would earn a total of  960.00  from holding Upstart Holdings or generate 48.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Against 
StrengthInsignificant
Accuracy83.37%
ValuesDaily Returns

Upstart Holdings  vs.  Coca Cola Europacific Partners

 Performance (%) 
       Timeline  
Upstart Holdings 
Upstart Performance
0 of 100
Over the last 90 days Upstart Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2022. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Upstart Price Channel

Coca Cola Europacific 
Coca Cola Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Coca Cola Europacific are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of very conflicting technical and fundamental indicators, Coca Cola may actually be approaching a critical reversion point that can send shares even higher in September 2022.

Coca Cola Price Channel

Upstart Holdings and Coca Cola Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Upstart Holdings and Coca Cola

The main advantage of trading using opposite Upstart Holdings and Coca Cola positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Upstart Holdings position performs unexpectedly, Coca Cola 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 Coca Cola will offset losses from the drop in Coca Cola's long position.
The idea behind Upstart Holdings and Coca Cola Europacific 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.

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