Correlation Between Elastic NV and HubSpot

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

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

Diversification Opportunities for Elastic NV and HubSpot

0.57

Correlation Coefficient

Elastic NV  HubSpot

Very weak diversification

The 3 months correlation between Elastic and HubSpot is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Elastic NV and HubSpot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HubSpot and Elastic NV 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 Elastic NV are associated (or correlated) with HubSpot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HubSpot has no effect on the direction of Elastic NV i.e., Elastic NV and HubSpot go up and down completely randomly.

Pair Corralation between Elastic NV and HubSpot

Given the investment horizon of 90 days Elastic NV is expected to generate 1.32 times more return on investment than HubSpot. However, Elastic NV is 1.32 times more volatile than HubSpot. It trades about 0.23 of its potential returns per unit of risk. HubSpot is currently generating about 0.3 per unit of risk. If you would invest  7,619  in Elastic NV on August 30, 2024 and sell it today you would earn a total of  3,394  from holding Elastic NV or generate 44.55% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.44%
Values	Daily Returns

Elastic NV  vs.  HubSpot

Elastic NV

Risk-Adjusted Performance

18 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Elastic NV are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Elastic NV exhibited solid returns over the last few months and may actually be approaching a breakup point.

HubSpot

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal fundamental drivers, HubSpot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Elastic NV and HubSpot

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

The idea behind Elastic NV and HubSpot 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.