Correlation Between HubSpot and ZoomInfo Technologies

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

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

Diversification Opportunities for HubSpot and ZoomInfo Technologies

0.54

Correlation Coefficient

HubSpot  ZoomInfo Technologies

Very weak diversification

The 3 months correlation between HubSpot and ZoomInfo is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding HubSpot and ZoomInfo Technologies in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ZoomInfo Technologies 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 ZoomInfo Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ZoomInfo Technologies has no effect on the direction of HubSpot i.e., HubSpot and ZoomInfo Technologies go up and down completely randomly.

Pair Corralation between HubSpot and ZoomInfo Technologies

Given the investment horizon of 90 days HubSpot is expected to generate 0.45 times more return on investment than ZoomInfo Technologies. However, HubSpot is 2.24 times less risky than ZoomInfo Technologies. It trades about 0.47 of its potential returns per unit of risk. ZoomInfo Technologies is currently generating about 0.04 per unit of risk. If you would invest  56,321  in HubSpot on August 30, 2024 and sell it today you would earn a total of  15,955  from holding HubSpot or generate 28.33% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	95.65%
Values	Daily Returns

HubSpot  vs.  ZoomInfo Technologies

HubSpot

Risk-Adjusted Performance

23 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 23 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively abnormal fundamental drivers, HubSpot unveiled solid returns over the last few months and may actually be approaching a breakup point.

ZoomInfo Technologies

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in ZoomInfo Technologies are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite fairly weak forward indicators, ZoomInfo Technologies demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HubSpot and ZoomInfo Technologies

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

The idea behind HubSpot and ZoomInfo Technologies 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.