Correlation Between Superior Plus and HubSpot

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

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

Diversification Opportunities for Superior Plus and HubSpot

-0.85

Correlation Coefficient

Superior Plus  HubSpot

Pay attention - limited upside

The 3 months correlation between Superior and HubSpot is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Superior Plus Corp and HubSpot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HubSpot and Superior Plus 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 Superior Plus Corp are associated (or correlated) with HubSpot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HubSpot has no effect on the direction of Superior Plus i.e., Superior Plus and HubSpot go up and down completely randomly.

Pair Corralation between Superior Plus and HubSpot

Assuming the 90 days horizon Superior Plus Corp is expected to under-perform the HubSpot. In addition to that, Superior Plus is 1.47 times more volatile than HubSpot. It trades about -0.04 of its total potential returns per unit of risk. HubSpot is currently generating about 0.29 per unit of volatility. If you would invest  44,820  in HubSpot on September 1, 2024 and sell it today you would earn a total of  23,260  from holding HubSpot or generate 51.9% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	98.48%
Values	Daily Returns

Superior Plus Corp  vs.  HubSpot

Superior Plus Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Superior Plus Corp has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest fragile performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

HubSpot

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, HubSpot reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Superior Plus and HubSpot

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

The idea behind Superior Plus Corp and HubSpot 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.