Correlation Between MongoDB and Adyen NV

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

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

Diversification Opportunities for MongoDB and Adyen NV

0.42

Correlation Coefficient

MongoDB  Adyen NV

Very weak diversification

The 3 months correlation between MongoDB and Adyen is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding MongoDB and Adyen NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adyen NV 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 Adyen NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adyen NV has no effect on the direction of MongoDB i.e., MongoDB and Adyen NV go up and down completely randomly.

Pair Corralation between MongoDB and Adyen NV

Assuming the 90 days horizon MongoDB is expected to under-perform the Adyen NV. In addition to that, MongoDB is 1.28 times more volatile than Adyen NV. It trades about -0.1 of its total potential returns per unit of risk. Adyen NV is currently generating about 0.14 per unit of volatility. If you would invest  144,340  in Adyen NV on December 4, 2024 and sell it today you would earn a total of  30,660  from holding Adyen NV or generate 21.24% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	98.33%
Values	Daily Returns

MongoDB  vs.  Adyen NV

MongoDB

Risk-Adjusted Performance

Very Weak

Over the last 90 days MongoDB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Adyen NV

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Adyen NV are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Adyen NV reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with MongoDB and Adyen NV

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

The idea behind MongoDB and Adyen NV 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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.