Correlation Between HubSpot and MondayCom

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

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

Diversification Opportunities for HubSpot and MondayCom

0.36

Correlation Coefficient

HubSpot  MondayCom

Weak diversification

The 3 months correlation between HubSpot and MondayCom is 0.36. Overlapping area represents the amount of risk that can be diversified away by holding HubSpot and MondayCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MondayCom and HubSpot 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 HubSpot 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 HubSpot i.e., HubSpot and MondayCom go up and down completely randomly.

Pair Corralation between HubSpot and MondayCom

Given the investment horizon of 90 days HubSpot is expected to under-perform the MondayCom. But the stock apears to be less risky and, when comparing its historical volatility, HubSpot is 1.97 times less risky than MondayCom. The stock trades about -0.11 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

HubSpot  vs.  MondayCom

HubSpot

Risk-Adjusted Performance

Very Weak

Over the last 90 days HubSpot has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's fundamental drivers remain comparatively stable which may send shares a bit higher in April 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private 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 HubSpot and MondayCom

The main advantage of trading using opposite HubSpot and MondayCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if HubSpot 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 HubSpot 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.