Correlation Between MondayCom and Elastic NV

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

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

Diversification Opportunities for MondayCom and Elastic NV

0.59

Correlation Coefficient

MondayCom  Elastic NV

Very weak diversification

The 3 months correlation between MondayCom and Elastic is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding MondayCom and Elastic NV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elastic NV and MondayCom 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 MondayCom are associated (or correlated) with Elastic NV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elastic NV has no effect on the direction of MondayCom i.e., MondayCom and Elastic NV go up and down completely randomly.

Pair Corralation between MondayCom and Elastic NV

Given the investment horizon of 90 days MondayCom is expected to generate 1.27 times more return on investment than Elastic NV. However, MondayCom is 1.27 times more volatile than Elastic NV. It trades about 0.04 of its potential returns per unit of risk. Elastic NV is currently generating about -0.02 per unit of risk. If you would invest  23,529  in MondayCom on December 30, 2024 and sell it today you would earn a total of  1,172  from holding MondayCom or generate 4.98% return on investment over 90 days.

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

MondayCom  vs.  Elastic NV

MondayCom

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in MondayCom are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of fairly conflicting fundamental indicators, MondayCom may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Elastic NV

Risk-Adjusted Performance

Very Weak

Over the last 90 days Elastic NV has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of rather sound basic indicators, Elastic NV is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with MondayCom and Elastic NV

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

The idea behind MondayCom and Elastic 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.

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 Portfolio Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.