Correlation Between Gitlab and MondayCom

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

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

Diversification Opportunities for Gitlab and MondayCom

0.34

Correlation Coefficient

Gitlab  MondayCom

Weak diversification

The 3 months correlation between Gitlab and MondayCom is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Gitlab Inc and MondayCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MondayCom 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 MondayCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MondayCom has no effect on the direction of Gitlab i.e., Gitlab and MondayCom go up and down completely randomly.

Pair Corralation between Gitlab and MondayCom

Given the investment horizon of 90 days Gitlab Inc is expected to under-perform the MondayCom. But the stock apears to be less risky and, when comparing its historical volatility, Gitlab Inc is 1.23 times less risky than MondayCom. The stock trades about -0.05 of its potential returns per unit of risk. The MondayCom is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  23,529  in MondayCom on December 30, 2024 and sell it today you would earn a total of  1,172  from holding MondayCom or generate 4.98% return on investment over 90 days.

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

Gitlab Inc  vs.  MondayCom

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.

MondayCom

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MondayCom are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, MondayCom may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with Gitlab and MondayCom

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

The idea behind Gitlab Inc and MondayCom 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.