Correlation Between MondayCom and Couchbase

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

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

Diversification Opportunities for MondayCom and Couchbase

0.11

Correlation Coefficient

MondayCom  Couchbase

Average diversification

The 3 months correlation between MondayCom and Couchbase is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding MondayCom and Couchbase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Couchbase and MondayCom 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 MondayCom 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 MondayCom i.e., MondayCom and Couchbase go up and down completely randomly.

Pair Corralation between MondayCom and Couchbase

Given the investment horizon of 90 days MondayCom is expected to under-perform the Couchbase. But the stock apears to be less risky and, when comparing its historical volatility, MondayCom is 1.05 times less risky than Couchbase. The stock trades about -0.05 of its potential returns per unit of risk. The Couchbase is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  1,491  in Couchbase on September 26, 2024 and sell it today you would earn a total of  59.00  from holding Couchbase or generate 3.96% return on investment over 90 days.

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

MondayCom  vs.  Couchbase

MondayCom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MondayCom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest fragile performance, the Stock's fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Couchbase

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Couchbase are ranked lower than 2 (%) 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 MondayCom and Couchbase

The main advantage of trading using opposite MondayCom and Couchbase positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MondayCom 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 MondayCom 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.

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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..