Correlation Between Gitlab and Elkhorn

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

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

Diversification Opportunities for Gitlab and Elkhorn

0.72

Correlation Coefficient

Gitlab  Elkhorn

Poor diversification

The 3 months correlation between Gitlab and Elkhorn is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Gitlab Inc and Elkhorn in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elkhorn 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 Elkhorn. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elkhorn has no effect on the direction of Gitlab i.e., Gitlab and Elkhorn go up and down completely randomly.

Pair Corralation between Gitlab and Elkhorn

If you would invest  4,360  in Gitlab Inc on September 23, 2024 and sell it today you would earn a total of  1,623  from holding Gitlab Inc or generate 37.22% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	0.79%
Values	Daily Returns

Gitlab Inc  vs.  Elkhorn

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.

Elkhorn

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Elkhorn has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy primary indicators, Elkhorn is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gitlab and Elkhorn

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

The idea behind Gitlab Inc and Elkhorn 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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.