Correlation Between Eventbrite and MondayCom

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

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

Diversification Opportunities for Eventbrite and MondayCom

-0.04

Correlation Coefficient

Eventbrite  MondayCom

Good diversification

The 3 months correlation between Eventbrite and MondayCom is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding Eventbrite Class A and MondayCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MondayCom and Eventbrite 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 Eventbrite Class A are associated (or correlated) with MondayCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MondayCom has no effect on the direction of Eventbrite i.e., Eventbrite and MondayCom go up and down completely randomly.

Pair Corralation between Eventbrite and MondayCom

Allowing for the 90-day total investment horizon Eventbrite Class A is expected to under-perform the MondayCom. In addition to that, Eventbrite is 1.1 times more volatile than MondayCom. It trades about -0.01 of its total potential returns per unit of risk. MondayCom is currently generating about 0.05 per unit of volatility. If you would invest  11,943  in MondayCom on September 21, 2024 and sell it today you would earn a total of  10,526  from holding MondayCom or generate 88.14% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Eventbrite Class A  vs.  MondayCom

Eventbrite Class A

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Eventbrite Class A are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental drivers, Eventbrite sustained solid returns over the last few months and may actually be approaching a breakup point.

MondayCom

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MondayCom has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fragile performance in the last few months, the Stock's fundamental indicators remain fairly strong which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Eventbrite and MondayCom

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

The idea behind Eventbrite Class A and MondayCom 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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.