Correlation Between Toast and Gitlab

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

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

Diversification Opportunities for Toast and Gitlab

0.15

Correlation Coefficient

Toast  Gitlab

Average diversification

The 3 months correlation between Toast and Gitlab is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Toast Inc and Gitlab Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gitlab Inc and Toast 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 Toast Inc are associated (or correlated) with Gitlab. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gitlab Inc has no effect on the direction of Toast i.e., Toast and Gitlab go up and down completely randomly.

Pair Corralation between Toast and Gitlab

Given the investment horizon of 90 days Toast Inc is expected to generate 0.74 times more return on investment than Gitlab. However, Toast Inc is 1.35 times less risky than Gitlab. It trades about 0.03 of its potential returns per unit of risk. Gitlab Inc is currently generating about -0.01 per unit of risk. If you would invest  4,274  in Toast Inc on May 26, 2025 and sell it today you would earn a total of  126.00  from holding Toast Inc or generate 2.95% return on investment over 90 days.

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

Toast Inc  vs.  Gitlab Inc

Toast Inc

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Toast Inc are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Toast is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Gitlab Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days Gitlab Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong essential indicators, Gitlab is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Toast and Gitlab

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

The idea behind Toast Inc and Gitlab Inc 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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.