Correlation Between HubSpot and Digital Turbine

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

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

Diversification Opportunities for HubSpot and Digital Turbine

-0.74

Correlation Coefficient

HubSpot  Digital Turbine

Pay attention - limited upside

The 3 months correlation between HubSpot and Digital is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding HubSpot and Digital Turbine in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digital Turbine 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 Digital Turbine. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digital Turbine has no effect on the direction of HubSpot i.e., HubSpot and Digital Turbine go up and down completely randomly.

Pair Corralation between HubSpot and Digital Turbine

Given the investment horizon of 90 days HubSpot is expected to generate 0.21 times more return on investment than Digital Turbine. However, HubSpot is 4.83 times less risky than Digital Turbine. It trades about 0.46 of its potential returns per unit of risk. Digital Turbine is currently generating about -0.29 per unit of risk. If you would invest  53,714  in HubSpot on August 19, 2024 and sell it today you would earn a total of  13,993  from holding HubSpot or generate 26.05% return on investment over 90 days.

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

HubSpot  vs.  Digital Turbine

HubSpot

Risk-Adjusted Performance

20 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in HubSpot are ranked lower than 20 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively unsteady fundamental drivers, HubSpot unveiled solid returns over the last few months and may actually be approaching a breakup point.

Digital Turbine

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Digital Turbine has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of abnormal performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in December 2024. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with HubSpot and Digital Turbine

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

The idea behind HubSpot and Digital Turbine 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.