Correlation Between Couchbase and Looking Glass

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

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

Diversification Opportunities for Couchbase and Looking Glass

-0.57

Correlation Coefficient

Couchbase  Looking Glass

Excellent diversification

The 3 months correlation between Couchbase and Looking is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Couchbase and Looking Glass Labs in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Looking Glass Labs 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 Looking Glass. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Looking Glass Labs has no effect on the direction of Couchbase i.e., Couchbase and Looking Glass go up and down completely randomly.

Pair Corralation between Couchbase and Looking Glass

If you would invest  1,392  in Couchbase on September 18, 2024 and sell it today you would earn a total of  162.00  from holding Couchbase or generate 11.64% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	1.59%
Values	Daily Returns

Couchbase  vs.  Looking Glass Labs

Couchbase

Risk-Adjusted Performance

5 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Couchbase are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Couchbase exhibited solid returns over the last few months and may actually be approaching a breakup point.

Looking Glass Labs

Risk-Adjusted Performance

0 of 100

Very Weak

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

Pair Trading with Couchbase and Looking Glass

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

The idea behind Couchbase and Looking Glass Labs 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.