Correlation Between ForgeRock and Couchbase

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

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

Diversification Opportunities for ForgeRock and Couchbase

0.0

Correlation Coefficient

ForgeRock  Couchbase

Pay attention - limited upside

The 3 months correlation between ForgeRock and Couchbase is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding ForgeRock and Couchbase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Couchbase and ForgeRock 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 ForgeRock are associated (or correlated) with Couchbase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Couchbase has no effect on the direction of ForgeRock i.e., ForgeRock and Couchbase go up and down completely randomly.

Pair Corralation between ForgeRock and Couchbase

If you would invest  1,419  in Couchbase on September 14, 2024 and sell it today you would earn a total of  115.00  from holding Couchbase or generate 8.1% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.56%
Values	Daily Returns

ForgeRock  vs.  Couchbase

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 current stock price disturbance, may contribute to mid-run losses for the stockholders.

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.

Pair Trading with ForgeRock and Couchbase

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

The idea behind ForgeRock and Couchbase 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.

Check out your portfolio center.

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 Transaction History module to view history of all your transactions and understand their impact on performance.