Correlation Between Gitlab and Sprinklr

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

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

Diversification Opportunities for Gitlab and Sprinklr

0.4

Correlation Coefficient

Gitlab  Sprinklr

Very weak diversification

The 3 months correlation between Gitlab and Sprinklr is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Gitlab Inc and Sprinklr in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sprinklr 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 Sprinklr. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sprinklr has no effect on the direction of Gitlab i.e., Gitlab and Sprinklr go up and down completely randomly.

Pair Corralation between Gitlab and Sprinklr

Given the investment horizon of 90 days Gitlab is expected to generate 1.22 times less return on investment than Sprinklr. In addition to that, Gitlab is 1.34 times more volatile than Sprinklr. It trades about 0.14 of its total potential returns per unit of risk. Sprinklr is currently generating about 0.23 per unit of volatility. If you would invest  1,146  in Sprinklr on February 21, 2024 and sell it today you would earn a total of  105.00  from holding Sprinklr or generate 9.16% return on investment over 90 days.

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

Gitlab Inc  vs.  Sprinklr

Gitlab Inc

Risk-Adjusted Performance

0 of 100

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 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Sprinklr

Risk-Adjusted Performance

1 of 100

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sprinklr are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Sprinklr is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Gitlab and Sprinklr

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

The idea behind Gitlab Inc and Sprinklr 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.