Correlation Between Roblox Corp and Upstart Holdings

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

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

Diversification Opportunities for Roblox Corp and Upstart Holdings

0.84

Correlation Coefficient

Roblox Corp  Upstart Holdings

Very poor diversification

The 3 months correlation between Roblox and Upstart is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Roblox Corp and Upstart Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Upstart Holdings and Roblox Corp 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 Roblox Corp 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 Roblox Corp i.e., Roblox Corp and Upstart Holdings go up and down completely randomly.

Pair Corralation between Roblox Corp and Upstart Holdings

Given the investment horizon of 90 days Roblox Corp is expected to generate 0.65 times more return on investment than Upstart Holdings. However, Roblox Corp is 1.53 times less risky than Upstart Holdings. It trades about 0.26 of its potential returns per unit of risk. Upstart Holdings is currently generating about 0.15 per unit of risk. If you would invest  8,121  in Roblox Corp on May 17, 2025 and sell it today you would earn a total of  4,407  from holding Roblox Corp or generate 54.27% return on investment over 90 days.

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

Roblox Corp  vs.  Upstart Holdings

Roblox Corp

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Roblox Corp are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak essential indicators, Roblox Corp showed solid returns over the last few months and may actually be approaching a breakup point.

Upstart Holdings

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Upstart Holdings are ranked lower than 11 (%) 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.

Pair Trading with Roblox Corp and Upstart Holdings

The main advantage of trading using opposite Roblox Corp and Upstart Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roblox Corp 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 Roblox Corp 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.