Correlation Between Rafael Holdings and MongoDB

Specify exactly 2 symbols:
Can any of the company-specific risk be diversified away by investing in both Rafael Holdings and MongoDB 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 Rafael Holdings and MongoDB into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Rafael Holdings Class and MongoDB, you can compare the effects of market volatilities on Rafael Holdings and MongoDB 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 Rafael Holdings with a short position of MongoDB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Rafael Holdings and MongoDB.

Diversification Opportunities for Rafael Holdings and MongoDB

0.44
  Correlation Coefficient

Very weak diversification

The 3 months correlation between Rafael and MongoDB is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Rafael Holdings Class and MongoDB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MongoDB and Rafael Holdings 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 Rafael Holdings Class are associated (or correlated) with MongoDB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MongoDB has no effect on the direction of Rafael Holdings i.e., Rafael Holdings and MongoDB go up and down completely randomly.

Pair Corralation between Rafael Holdings and MongoDB

Considering the 90-day investment horizon Rafael Holdings is expected to generate 12.77 times less return on investment than MongoDB. But when comparing it to its historical volatility, Rafael Holdings Class is 1.33 times less risky than MongoDB. It trades about 0.0 of its potential returns per unit of risk. MongoDB is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  31,548  in MongoDB on December 29, 2023 and sell it today you would earn a total of  4,332  from holding MongoDB or generate 13.73% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthWeak
Accuracy100.0%
ValuesDaily Returns

Rafael Holdings Class  vs.  MongoDB

 Performance 
       Timeline  
Rafael Holdings Class 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
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 current stock price mess, may contribute to short-term losses for the institutional investors.
MongoDB 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days MongoDB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain 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.

Rafael Holdings and MongoDB Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Rafael Holdings and MongoDB

The main advantage of trading using opposite Rafael Holdings and MongoDB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rafael Holdings position performs unexpectedly, MongoDB 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 MongoDB will offset losses from the drop in MongoDB's long position.
The idea behind Rafael Holdings Class and MongoDB 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.

Other Complementary Tools

Portfolio Volatility
Check portfolio volatility and analyze historical return density to properly model market risk
Content Syndication
Quickly integrate customizable finance content to your own investment portal
Performance Analysis
Check effects of mean-variance optimization against your current asset allocation
Efficient Frontier
Plot and analyze your portfolio and positions against risk-return landscape of the market.
Sectors
List of equity sectors categorizing publicly traded companies based on their primary business activities
Portfolio Optimization
Compute new portfolio that will generate highest expected return given your specified tolerance for risk
Earnings Calls
Check upcoming earnings announcements updated hourly across public exchanges