Correlation Between Global E and MondayCom

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

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

Diversification Opportunities for Global E and MondayCom

0.01

Correlation Coefficient

Global E  MondayCom

Significant diversification

The 3 months correlation between Global and MondayCom is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding Global E Online and MondayCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MondayCom and Global E 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 Global E Online 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 Global E i.e., Global E and MondayCom go up and down completely randomly.

Pair Corralation between Global E and MondayCom

Given the investment horizon of 90 days Global E Online is expected to under-perform the MondayCom. But the stock apears to be less risky and, when comparing its historical volatility, Global E Online is 1.42 times less risky than MondayCom. The stock trades about -0.16 of its potential returns per unit of risk. The MondayCom is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  23,185  in MondayCom on December 23, 2024 and sell it today you would earn a total of  3,360  from holding MondayCom or generate 14.49% return on investment over 90 days.

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

Global E Online  vs.  MondayCom

Global E Online

Risk-Adjusted Performance

Very Weak

Over the last 90 days Global E Online has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of inconsistent performance in the last few months, the Stock's fundamental drivers remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

MondayCom

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in MondayCom are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of fairly fragile fundamental indicators, MondayCom showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Global E and MondayCom

The main advantage of trading using opposite Global E and MondayCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global E 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 Global E Online 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.