Correlation Between Expensify and Gitlab

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

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

Diversification Opportunities for Expensify and Gitlab

0.72

Correlation Coefficient

Expensify  Gitlab

Poor diversification

The 3 months correlation between Expensify and Gitlab is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Expensify and Gitlab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gitlab Inc and Expensify 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 Expensify 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 Expensify i.e., Expensify and Gitlab go up and down completely randomly.

Pair Corralation between Expensify and Gitlab

Given the investment horizon of 90 days Expensify is expected to generate 1.72 times more return on investment than Gitlab. However, Expensify is 1.72 times more volatile than Gitlab Inc. It trades about 0.21 of its potential returns per unit of risk. Gitlab Inc is currently generating about 0.11 per unit of risk. If you would invest  202.00  in Expensify on September 26, 2024 and sell it today you would earn a total of  152.00  from holding Expensify or generate 75.25% return on investment over 90 days.

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

Expensify  vs.  Gitlab Inc

Expensify

Risk-Adjusted Performance

16 of 100

Solid

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

Gitlab Inc

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Gitlab Inc are ranked lower than 8 (%) 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.

Pair Trading with Expensify and Gitlab

The main advantage of trading using opposite Expensify and Gitlab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Expensify 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 Expensify 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.

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.