Correlation Between Gitlab and Trade Desk

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

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

Diversification Opportunities for Gitlab and Trade Desk

0.77

Correlation Coefficient

Gitlab  Trade Desk

Poor diversification

The 3 months correlation between Gitlab and Trade is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Gitlab Inc and Trade Desk in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Trade Desk 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 Trade Desk. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Trade Desk has no effect on the direction of Gitlab i.e., Gitlab and Trade Desk go up and down completely randomly.

Pair Corralation between Gitlab and Trade Desk

Given the investment horizon of 90 days Gitlab Inc is expected to generate 0.86 times more return on investment than Trade Desk. However, Gitlab Inc is 1.17 times less risky than Trade Desk. It trades about 0.3 of its potential returns per unit of risk. Trade Desk is currently generating about 0.09 per unit of risk. If you would invest  5,456  in Gitlab Inc on August 31, 2024 and sell it today you would earn a total of  924.00  from holding Gitlab Inc or generate 16.94% return on investment over 90 days.

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

Gitlab Inc  vs.  Trade Desk

Gitlab Inc

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Gitlab Inc are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite somewhat conflicting essential indicators, Gitlab sustained solid returns over the last few months and may actually be approaching a breakup point.

Trade Desk

Risk-Adjusted Performance

15 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Trade Desk are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, Trade Desk exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gitlab and Trade Desk

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

The idea behind Gitlab Inc and Trade Desk 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.

Check out your portfolio center.

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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.