Correlation Between MongoDB and Crowdstrike Holdings

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

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

Diversification Opportunities for MongoDB and Crowdstrike Holdings

0.13

Correlation Coefficient

MongoDB  Crowdstrike Holdings

Average diversification

The 3 months correlation between MongoDB and Crowdstrike is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding MongoDB and Crowdstrike Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Crowdstrike Holdings 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 Crowdstrike Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Crowdstrike Holdings has no effect on the direction of MongoDB i.e., MongoDB and Crowdstrike Holdings go up and down completely randomly.

Pair Corralation between MongoDB and Crowdstrike Holdings

Considering the 90-day investment horizon MongoDB is expected to under-perform the Crowdstrike Holdings. In addition to that, MongoDB is 1.2 times more volatile than Crowdstrike Holdings. It trades about -0.09 of its total potential returns per unit of risk. Crowdstrike Holdings is currently generating about 0.07 per unit of volatility. If you would invest  34,597  in Crowdstrike Holdings on November 28, 2024 and sell it today you would earn a total of  3,378  from holding Crowdstrike Holdings or generate 9.76% return on investment over 90 days.

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

MongoDB  vs.  Crowdstrike Holdings

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 unsteady performance in the last few months, the Stock's fundamental indicators remain somewhat strong which may send shares a bit higher in March 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Crowdstrike Holdings

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Crowdstrike Holdings are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of rather conflicting basic indicators, Crowdstrike Holdings may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with MongoDB and Crowdstrike Holdings

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

The idea behind MongoDB and Crowdstrike Holdings 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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.