Correlation Between HubSpot and Manhattan Associates

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

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

Diversification Opportunities for HubSpot and Manhattan Associates

0.29

Correlation Coefficient

HubSpot  Manhattan Associates

Modest diversification

The 3 months correlation between HubSpot and Manhattan is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding HubSpot and Manhattan Associates in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Manhattan Associates and HubSpot 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 HubSpot are associated (or correlated) with Manhattan Associates. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Manhattan Associates has no effect on the direction of HubSpot i.e., HubSpot and Manhattan Associates go up and down completely randomly.

Pair Corralation between HubSpot and Manhattan Associates

Given the investment horizon of 90 days HubSpot is expected to generate 1.4 times less return on investment than Manhattan Associates. In addition to that, HubSpot is 1.12 times more volatile than Manhattan Associates. It trades about 0.08 of its total potential returns per unit of risk. Manhattan Associates is currently generating about 0.12 per unit of volatility. If you would invest  21,450  in Manhattan Associates on August 31, 2024 and sell it today you would earn a total of  7,094  from holding Manhattan Associates or generate 33.07% return on investment over 90 days.

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

HubSpot  vs.  Manhattan Associates

HubSpot

Risk-Adjusted Performance

24 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 24 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak fundamental drivers, HubSpot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Manhattan Associates

Risk-Adjusted Performance

8 of 100

OK

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

Pair Trading with HubSpot and Manhattan Associates

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

The idea behind HubSpot and Manhattan Associates 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..