Correlation Between MongoDB and Xcel Brands
Can any of the company-specific risk be diversified away by investing in both MongoDB and Xcel Brands 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 Xcel Brands into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MongoDB and Xcel Brands, you can compare the effects of market volatilities on MongoDB and Xcel Brands 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 Xcel Brands. Check out your portfolio center. Please also check ongoing floating volatility patterns of MongoDB and Xcel Brands.
Diversification Opportunities for MongoDB and Xcel Brands
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between MongoDB and Xcel is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding MongoDB and Xcel Brands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xcel Brands 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 Xcel Brands. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xcel Brands has no effect on the direction of MongoDB i.e., MongoDB and Xcel Brands go up and down completely randomly.
Pair Corralation between MongoDB and Xcel Brands
Considering the 90-day investment horizon MongoDB is expected to generate 1.3 times more return on investment than Xcel Brands. However, MongoDB is 1.3 times more volatile than Xcel Brands. It trades about 0.27 of its potential returns per unit of risk. Xcel Brands is currently generating about -0.22 per unit of risk. If you would invest 26,739 in MongoDB on September 4, 2024 and sell it today you would earn a total of 5,662 from holding MongoDB or generate 21.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MongoDB vs. Xcel Brands
Performance |
| Timeline |
| MongoDB |
| Xcel Brands |
MongoDB and Xcel Brands Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MongoDB and Xcel Brands
The main advantage of trading using opposite MongoDB and Xcel Brands positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MongoDB position performs unexpectedly, Xcel Brands 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 Xcel Brands will offset losses from the drop in Xcel Brands' long position.| MongoDB vs. Crowdstrike Holdings | MongoDB vs. Okta Inc | MongoDB vs. Cloudflare | MongoDB vs. Palo Alto Networks |
| Xcel Brands vs. Appian Corp | Xcel Brands vs. Okta Inc | Xcel Brands vs. MongoDB | Xcel Brands vs. Twilio Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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