Correlation Between EPlus and Gitlab

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

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

Diversification Opportunities for EPlus and Gitlab

0.56

Correlation Coefficient

EPlus  Gitlab

Very weak diversification

The 3 months correlation between EPlus and Gitlab is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding ePlus inc and Gitlab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gitlab Inc and EPlus 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 ePlus inc are associated (or correlated) with Gitlab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gitlab Inc has no effect on the direction of EPlus i.e., EPlus and Gitlab go up and down completely randomly.

Pair Corralation between EPlus and Gitlab

Given the investment horizon of 90 days ePlus inc is expected to under-perform the Gitlab. But the stock apears to be less risky and, when comparing its historical volatility, ePlus inc is 1.71 times less risky than Gitlab. The stock trades about -0.08 of its potential returns per unit of risk. The Gitlab Inc is currently generating about -0.03 of returns per unit of risk over similar time horizon. If you would invest  5,647  in Gitlab Inc on December 28, 2024 and sell it today you would lose (629.00) from holding Gitlab Inc or give up 11.14% of portfolio value over 90 days.

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

ePlus inc  vs.  Gitlab Inc

ePlus inc

Risk-Adjusted Performance

Very Weak

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

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.

Pair Trading with EPlus and Gitlab

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

The idea behind ePlus inc and Gitlab Inc 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.