Correlation Between SoFi Technologies and Upstart Holdings

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

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

Diversification Opportunities for SoFi Technologies and Upstart Holdings

0.93

Correlation Coefficient

SoFi Technologies  Upstart Holdings

Almost no diversification

The 3 months correlation between SoFi and Upstart is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding SoFi Technologies and Upstart Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upstart Holdings and SoFi Technologies 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 SoFi Technologies are associated (or correlated) with Upstart Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Upstart Holdings has no effect on the direction of SoFi Technologies i.e., SoFi Technologies and Upstart Holdings go up and down completely randomly.

Pair Corralation between SoFi Technologies and Upstart Holdings

Given the investment horizon of 90 days SoFi Technologies is expected to generate 0.85 times more return on investment than Upstart Holdings. However, SoFi Technologies is 1.17 times less risky than Upstart Holdings. It trades about 0.32 of its potential returns per unit of risk. Upstart Holdings is currently generating about 0.25 per unit of risk. If you would invest  950.00  in SoFi Technologies on February 7, 2025 and sell it today you would earn a total of  376.00  from holding SoFi Technologies or generate 39.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

SoFi Technologies  vs.  Upstart Holdings

SoFi Technologies

Risk-Adjusted Performance

Very Weak

Over the last 90 days SoFi Technologies has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong technical and fundamental indicators, SoFi Technologies is not utilizing all of its potentials. The newest stock price confusion, may contribute to short-horizon losses for the traders.

Upstart Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Upstart Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with SoFi Technologies and Upstart Holdings

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

The idea behind SoFi Technologies and Upstart Holdings 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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.