Correlation Between Gitlab and Model N
Can any of the company-specific risk be diversified away by investing in both Gitlab and Model N 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 Model N into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Gitlab Inc and Model N, you can compare the effects of market volatilities on Gitlab and Model N 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 Model N. Check out your portfolio center. Please also check ongoing floating volatility patterns of Gitlab and Model N.
Diversification Opportunities for Gitlab and Model N
Very weak diversification
The 3 months correlation between Gitlab and Model is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Gitlab Inc and Model N in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Model N 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 Model N. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Model N has no effect on the direction of Gitlab i.e., Gitlab and Model N go up and down completely randomly.
Pair Corralation between Gitlab and Model N
Given the investment horizon of 90 days Gitlab Inc is expected to generate 1.87 times more return on investment than Model N. However, Gitlab is 1.87 times more volatile than Model N. It trades about 0.04 of its potential returns per unit of risk. Model N is currently generating about -0.02 per unit of risk. If you would invest 4,195 in Gitlab Inc on August 27, 2024 and sell it today you would earn a total of 2,467 from holding Gitlab Inc or generate 58.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 78.83% |
| Values | Daily Returns |
Gitlab Inc vs. Model N
Performance |
| Timeline |
| Gitlab Inc |
| Model N |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Gitlab and Model N Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Gitlab and Model N
The main advantage of trading using opposite Gitlab and Model N positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Gitlab position performs unexpectedly, Model N 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 Model N will offset losses from the drop in Model N's long position.The idea behind Gitlab Inc and Model N 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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