Correlation Between HubSpot and Nice

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

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

Diversification Opportunities for HubSpot and Nice

0.63

Correlation Coefficient

HubSpot  Nice

Poor diversification

The 3 months correlation between HubSpot and Nice is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding HubSpot and Nice Ltd ADR in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nice Ltd ADR 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 Nice. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nice Ltd ADR has no effect on the direction of HubSpot i.e., HubSpot and Nice go up and down completely randomly.

Pair Corralation between HubSpot and Nice

Given the investment horizon of 90 days HubSpot is expected to generate 0.97 times more return on investment than Nice. However, HubSpot is 1.04 times less risky than Nice. It trades about -0.03 of its potential returns per unit of risk. Nice Ltd ADR is currently generating about -0.1 per unit of risk. If you would invest  72,105  in HubSpot on September 29, 2024 and sell it today you would lose (1,289) from holding HubSpot or give up 1.79% of portfolio value over 90 days.

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

HubSpot  vs.  Nice Ltd ADR

HubSpot

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively fragile fundamental drivers, HubSpot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Nice Ltd ADR

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nice Ltd ADR has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound fundamental indicators, Nice is not utilizing all of its potentials. The newest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with HubSpot and Nice

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

The idea behind HubSpot and Nice Ltd ADR 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.