Correlation Between MongoDB and Rafael Holdings

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

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

Diversification Opportunities for MongoDB and Rafael Holdings

0.61

Correlation Coefficient

MongoDB  Rafael Holdings

Poor diversification

The 3 months correlation between MongoDB and Rafael is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding MongoDB and Rafael Holdings Class in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rafael Holdings Class and MongoDB 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 MongoDB are associated (or correlated) with Rafael Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rafael Holdings Class has no effect on the direction of MongoDB i.e., MongoDB and Rafael Holdings go up and down completely randomly.

Pair Corralation between MongoDB and Rafael Holdings

Considering the 90-day investment horizon MongoDB is expected to generate 0.97 times more return on investment than Rafael Holdings. However, MongoDB is 1.03 times less risky than Rafael Holdings. It trades about 0.09 of its potential returns per unit of risk. Rafael Holdings Class is currently generating about 0.01 per unit of risk. If you would invest  35,412  in MongoDB on January 26, 2024 and sell it today you would earn a total of  1,517  from holding MongoDB or generate 4.28% return on investment over 90 days.

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

MongoDB  vs.  Rafael Holdings Class

MongoDB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MongoDB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, MongoDB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Rafael Holdings Class

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Rafael Holdings Class has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent technical and fundamental indicators, Rafael Holdings is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with MongoDB and Rafael Holdings

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

The idea behind MongoDB and Rafael Holdings Class 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.