Correlation Between Gitlab and Braze
Can any of the company-specific risk be diversified away by investing in both Gitlab and Braze 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 Braze into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gitlab Inc and Braze Inc, you can compare the effects of market volatilities on Gitlab and Braze 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 Braze. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gitlab and Braze.
Diversification Opportunities for Gitlab and Braze
Very weak diversification
The 3 months correlation between Gitlab and Braze is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Gitlab Inc and Braze Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Braze Inc 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 Braze. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Braze Inc has no effect on the direction of Gitlab i.e., Gitlab and Braze go up and down completely randomly.
Pair Corralation between Gitlab and Braze
Given the investment horizon of 90 days Gitlab Inc is expected to generate 1.21 times more return on investment than Braze. However, Gitlab is 1.21 times more volatile than Braze Inc. It trades about 0.01 of its potential returns per unit of risk. Braze Inc is currently generating about -0.02 per unit of risk. 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 |
Gitlab Inc vs. Braze Inc
Performance |
| Timeline |
| Gitlab Inc |
| Braze Inc |
Gitlab and Braze Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gitlab and Braze
The main advantage of trading using opposite Gitlab and Braze positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gitlab position performs unexpectedly, Braze 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 Braze will offset losses from the drop in Braze's long position.The idea behind Gitlab Inc and Braze 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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