Correlation Between Gitlab and DoubleVerify Holdings

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

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

Diversification Opportunities for Gitlab and DoubleVerify Holdings

0.9

Correlation Coefficient

Gitlab  DoubleVerify Holdings

Almost no diversification

The 3 months correlation between Gitlab and DoubleVerify is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Gitlab Inc and DoubleVerify Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DoubleVerify Holdings and Gitlab 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 Gitlab Inc are associated (or correlated) with DoubleVerify Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DoubleVerify Holdings has no effect on the direction of Gitlab i.e., Gitlab and DoubleVerify Holdings go up and down completely randomly.

Pair Corralation between Gitlab and DoubleVerify Holdings

Given the investment horizon of 90 days Gitlab Inc is expected to under-perform the DoubleVerify Holdings. In addition to that, Gitlab is 2.06 times more volatile than DoubleVerify Holdings. It trades about -0.15 of its total potential returns per unit of risk. DoubleVerify Holdings is currently generating about -0.01 per unit of volatility. If you would invest  2,007  in DoubleVerify Holdings on September 23, 2024 and sell it today you would lose (11.00) from holding DoubleVerify Holdings or give up 0.55% of portfolio value over 90 days.

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

Gitlab Inc  vs.  DoubleVerify Holdings

Gitlab Inc

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Gitlab Inc are ranked lower than 6 (%) 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.

DoubleVerify Holdings

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in DoubleVerify Holdings are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting basic indicators, DoubleVerify Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Gitlab and DoubleVerify Holdings

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

The idea behind Gitlab Inc and DoubleVerify Holdings 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.