Correlation Between Gitlab and Confluent

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

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

Diversification Opportunities for Gitlab and Confluent

0.94

Correlation Coefficient

Gitlab  Confluent

Almost no diversification

The 3 months correlation between Gitlab and Confluent is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Gitlab Inc and Confluent in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Confluent 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 Confluent. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Confluent has no effect on the direction of Gitlab i.e., Gitlab and Confluent go up and down completely randomly.

Pair Corralation between Gitlab and Confluent

Given the investment horizon of 90 days Gitlab Inc is expected to generate 0.49 times more return on investment than Confluent. However, Gitlab Inc is 2.04 times less risky than Confluent. It trades about 0.44 of its potential returns per unit of risk. Confluent is currently generating about 0.12 per unit of risk. If you would invest  4,097  in Gitlab Inc on February 17, 2025 and sell it today you would earn a total of  1,052  from holding Gitlab Inc or generate 25.68% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Strong
Accuracy	100.0%
Values	Daily Returns

Gitlab Inc  vs.  Confluent

Gitlab Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Gitlab Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite conflicting performance in the last few months, the Stock's essential indicators remain somewhat strong which may send shares a bit higher in June 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Confluent

Risk-Adjusted Performance

Very Weak

Over the last 90 days Confluent has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's essential indicators remain comparatively stable which may send shares a bit higher in June 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Gitlab and Confluent

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

The idea behind Gitlab Inc and Confluent 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.