Correlation Between MondayCom and SimilarWeb

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

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

Diversification Opportunities for MondayCom and SimilarWeb

-0.53

Correlation Coefficient

MondayCom  SimilarWeb

Excellent diversification

The 3 months correlation between MondayCom and SimilarWeb is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding MondayCom and SimilarWeb in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SimilarWeb 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 SimilarWeb. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SimilarWeb has no effect on the direction of MondayCom i.e., MondayCom and SimilarWeb go up and down completely randomly.

Pair Corralation between MondayCom and SimilarWeb

Given the investment horizon of 90 days MondayCom is expected to under-perform the SimilarWeb. In addition to that, MondayCom is 1.26 times more volatile than SimilarWeb. It trades about -0.05 of its total potential returns per unit of risk. SimilarWeb is currently generating about 0.29 per unit of volatility. If you would invest  904.00  in SimilarWeb on September 26, 2024 and sell it today you would earn a total of  562.00  from holding SimilarWeb or generate 62.17% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

MondayCom  vs.  SimilarWeb

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.

SimilarWeb

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in SimilarWeb are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, SimilarWeb sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MondayCom and SimilarWeb

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

The idea behind MondayCom and SimilarWeb 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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.