Correlation Between HubSpot and Coinbase Global

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

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

Diversification Opportunities for HubSpot and Coinbase Global

0.56

Correlation Coefficient

HubSpot  Coinbase Global

Very weak diversification

The 3 months correlation between HubSpot and Coinbase is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding HubSpot and Coinbase Global in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Coinbase Global and HubSpot 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 HubSpot are associated (or correlated) with Coinbase Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Coinbase Global has no effect on the direction of HubSpot i.e., HubSpot and Coinbase Global go up and down completely randomly.

Pair Corralation between HubSpot and Coinbase Global

Given the investment horizon of 90 days HubSpot is expected to generate 0.53 times more return on investment than Coinbase Global. However, HubSpot is 1.9 times less risky than Coinbase Global. It trades about 0.08 of its potential returns per unit of risk. Coinbase Global is currently generating about -0.2 per unit of risk. If you would invest  62,982  in HubSpot on January 25, 2024 and sell it today you would earn a total of  2,196  from holding HubSpot or generate 3.49% return on investment over 90 days.

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

HubSpot  vs.  Coinbase Global

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.

Coinbase Global

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Coinbase Global are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating forward indicators, Coinbase Global displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with HubSpot and Coinbase Global

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

The idea behind HubSpot and Coinbase Global 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 Stocks Directory module to find actively traded stocks across global markets.