Correlation Between Guidewire Software and HubSpot

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

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

Diversification Opportunities for Guidewire Software and HubSpot

0.83

Correlation Coefficient

Guidewire Software  HubSpot

Very poor diversification

The 3 months correlation between Guidewire and HubSpot is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Guidewire Software and HubSpot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HubSpot and Guidewire Software 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 Guidewire Software are associated (or correlated) with HubSpot. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HubSpot has no effect on the direction of Guidewire Software i.e., Guidewire Software and HubSpot go up and down completely randomly.

Pair Corralation between Guidewire Software and HubSpot

Given the investment horizon of 90 days Guidewire Software is expected to under-perform the HubSpot. But the stock apears to be less risky and, when comparing its historical volatility, Guidewire Software is 1.99 times less risky than HubSpot. The stock trades about -0.22 of its potential returns per unit of risk. The HubSpot is currently generating about -0.11 of returns per unit of risk over similar time horizon. If you would invest  49,679  in HubSpot on September 11, 2025 and sell it today you would lose (11,099) from holding HubSpot or give up 22.34% of portfolio value over 90 days.

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

Guidewire Software  vs.  HubSpot

Guidewire Software

Risk-Adjusted Performance

Weakest

Over the last 90 days Guidewire Software has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of conflicting performance in the last few months, the Stock's basic indicators remain rather sound which may send shares a bit higher in January 2026. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

HubSpot

Risk-Adjusted Performance

Weakest

Over the last 90 days HubSpot 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 fundamental drivers remain comparatively stable which may send shares a bit higher in January 2026. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Guidewire Software and HubSpot

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

The idea behind Guidewire Software and HubSpot 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.