Correlation Between MongoDB and Adobe

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

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

Diversification Opportunities for MongoDB and Adobe

0.78

Correlation Coefficient

MongoDB  Adobe

Poor diversification

The 3 months correlation between MongoDB and Adobe is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding MongoDB and Adobe Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Adobe Inc 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 Adobe. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Adobe Inc has no effect on the direction of MongoDB i.e., MongoDB and Adobe go up and down completely randomly.

Pair Corralation between MongoDB and Adobe

Assuming the 90 days horizon MongoDB is expected to under-perform the Adobe. In addition to that, MongoDB is 1.93 times more volatile than Adobe Inc. It trades about -0.07 of its total potential returns per unit of risk. Adobe Inc is currently generating about -0.08 per unit of volatility. If you would invest  52,500  in Adobe Inc on December 10, 2024 and sell it today you would lose (11,330) from holding Adobe Inc or give up 21.58% of portfolio value over 90 days.

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

MongoDB  vs.  Adobe Inc

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.

Adobe Inc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Adobe Inc 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.

Pair Trading with MongoDB and Adobe

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

The idea behind MongoDB and Adobe Inc 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..