Correlation Between Gitlab and Confluent

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

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

Diversification Opportunities for Gitlab and Confluent

0.69

Correlation Coefficient

Gitlab  Confluent

Poor diversification

The 3 months correlation between Gitlab and Confluent is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Gitlab Inc and Confluent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Confluent and Gitlab 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 Gitlab Inc are associated (or correlated) with Confluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Confluent has no effect on the direction of Gitlab i.e., Gitlab and Confluent go up and down completely randomly.

Pair Corralation between Gitlab and Confluent

Given the investment horizon of 90 days Gitlab Inc is expected to under-perform the Confluent. But the stock apears to be less risky and, when comparing its historical volatility, Gitlab Inc is 1.23 times less risky than Confluent. The stock trades about -0.05 of its potential returns per unit of risk. The Confluent is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  2,823  in Confluent on December 29, 2024 and sell it today you would lose (390.00) from holding Confluent or give up 13.82% of portfolio value over 90 days.

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

Gitlab Inc  vs.  Confluent

Gitlab Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gitlab Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Stock's essential indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Confluent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Confluent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Gitlab and Confluent

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

The idea behind Gitlab Inc and Confluent 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.