Correlation Between Braze and Gitlab
Can any of the company-specific risk be diversified away by investing in both Braze 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 Braze and Gitlab into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Braze Inc and Gitlab Inc, you can compare the effects of market volatilities on Braze 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 Braze with a short position of Gitlab. Check out your portfolio center. Please also check ongoing floating volatility patterns of Braze and Gitlab.
Diversification Opportunities for Braze and Gitlab
Very weak diversification
The 3 months correlation between Braze and Gitlab is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Braze Inc and Gitlab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gitlab Inc and Braze 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 Braze Inc 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 Braze i.e., Braze and Gitlab go up and down completely randomly.
Pair Corralation between Braze and Gitlab
Given the investment horizon of 90 days Braze Inc is expected to under-perform the Gitlab. But the stock apears to be less risky and, when comparing its historical volatility, Braze Inc is 1.21 times less risky than Gitlab. The stock trades about -0.02 of its potential returns per unit of risk. The Gitlab Inc is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 6,848 in Gitlab Inc on October 20, 2024 and sell it today you would lose (546.00) from holding Gitlab Inc or give up 7.97% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Braze Inc vs. Gitlab Inc
Performance |
| Timeline |
| Braze Inc |
| Gitlab Inc |
Braze and Gitlab Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Braze and Gitlab
The main advantage of trading using opposite Braze and Gitlab positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Braze 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 Braze Inc 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.Check out your portfolio center.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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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