Correlation Between Momentive Global and Gitlab

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

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

Diversification Opportunities for Momentive Global and Gitlab

0.34

Correlation Coefficient

Momentive Global  Gitlab

Weak diversification

The 3 months correlation between Momentive and Gitlab is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Momentive Global and Gitlab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gitlab Inc and Momentive Global 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 Momentive Global 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 Momentive Global i.e., Momentive Global and Gitlab go up and down completely randomly.

Pair Corralation between Momentive Global and Gitlab

If you would invest  5,141  in Gitlab Inc on September 26, 2024 and sell it today you would earn a total of  904.00  from holding Gitlab Inc or generate 17.58% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Momentive Global  vs.  Gitlab Inc

Momentive Global

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Momentive Global has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Momentive Global is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

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 Momentive Global and Gitlab

The main advantage of trading using opposite Momentive Global and Gitlab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Momentive Global 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 Momentive Global 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.