Correlation Between HubSpot and Eventbrite

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

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

Diversification Opportunities for HubSpot and Eventbrite

-0.45

Correlation Coefficient

HubSpot  Eventbrite

Very good diversification

The 3 months correlation between HubSpot and Eventbrite is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding HubSpot and Eventbrite Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eventbrite Class A 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 Eventbrite. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eventbrite Class A has no effect on the direction of HubSpot i.e., HubSpot and Eventbrite go up and down completely randomly.

Pair Corralation between HubSpot and Eventbrite

Given the investment horizon of 90 days HubSpot is expected to generate 0.9 times more return on investment than Eventbrite. However, HubSpot is 1.11 times less risky than Eventbrite. It trades about 0.05 of its potential returns per unit of risk. Eventbrite Class A is currently generating about -0.02 per unit of risk. If you would invest  36,901  in HubSpot on January 17, 2024 and sell it today you would earn a total of  26,862  from holding HubSpot or generate 72.79% return on investment over 90 days.

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

HubSpot  vs.  Eventbrite Class A

HubSpot

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively inconsistent fundamental drivers, HubSpot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Eventbrite Class A

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Eventbrite Class A has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's fundamental drivers remain somewhat strong which may send shares a bit higher in May 2024. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with HubSpot and Eventbrite

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

The idea behind HubSpot and Eventbrite Class A 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.