Correlation Between ChannelAdvisor Corp and HubSpot

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

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

Diversification Opportunities for ChannelAdvisor Corp and HubSpot

0.0

Correlation Coefficient

ChannelAdvisor Corp  HubSpot

Pay attention - limited upside

The 3 months correlation between ChannelAdvisor and HubSpot is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ChannelAdvisor Corp and HubSpot in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HubSpot and ChannelAdvisor Corp 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 ChannelAdvisor Corp 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 ChannelAdvisor Corp i.e., ChannelAdvisor Corp and HubSpot go up and down completely randomly.

Pair Corralation between ChannelAdvisor Corp and HubSpot

If you would invest  57,391  in HubSpot on January 18, 2024 and sell it today you would earn a total of  5,954  from holding HubSpot or generate 10.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.59%
Values	Daily Returns

ChannelAdvisor Corp  vs.  HubSpot

ChannelAdvisor Corp

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ChannelAdvisor Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, ChannelAdvisor Corp is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

HubSpot

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unfluctuating fundamental drivers, HubSpot may actually be approaching a critical reversion point that can send shares even higher in May 2024.

Pair Trading with ChannelAdvisor Corp and HubSpot

The main advantage of trading using opposite ChannelAdvisor Corp and HubSpot positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ChannelAdvisor Corp 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 ChannelAdvisor Corp 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.