Correlation Between Couchbase and ForgeRock

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

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

Diversification Opportunities for Couchbase and ForgeRock

-0.13

Correlation Coefficient

Couchbase  ForgeRock

Good diversification

The 3 months correlation between Couchbase and ForgeRock is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding Couchbase and ForgeRock in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ForgeRock and Couchbase 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 Couchbase are associated (or correlated) with ForgeRock. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ForgeRock has no effect on the direction of Couchbase i.e., Couchbase and ForgeRock go up and down completely randomly.

Pair Corralation between Couchbase and ForgeRock

If you would invest  2,039  in ForgeRock on September 14, 2024 and sell it today you would earn a total of  0.00  from holding ForgeRock or generate 0.0% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	0.4%
Values	Daily Returns

Couchbase  vs.  ForgeRock

Couchbase

Risk-Adjusted Performance

4 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Couchbase are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Couchbase may actually be approaching a critical reversion point that can send shares even higher in January 2025.

ForgeRock

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days ForgeRock has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, ForgeRock is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Couchbase and ForgeRock

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

The idea behind Couchbase and ForgeRock 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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.