Correlation Between Stitch Fix and MongoDB

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

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

Diversification Opportunities for Stitch Fix and MongoDB

0.81

Correlation Coefficient

Stitch Fix  MongoDB

Very poor diversification

The 3 months correlation between Stitch and MongoDB is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Stitch Fix and MongoDB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MongoDB and Stitch Fix 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 Stitch Fix are associated (or correlated) with MongoDB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MongoDB has no effect on the direction of Stitch Fix i.e., Stitch Fix and MongoDB go up and down completely randomly.

Pair Corralation between Stitch Fix and MongoDB

Given the investment horizon of 90 days Stitch Fix is expected to generate 0.84 times more return on investment than MongoDB. However, Stitch Fix is 1.19 times less risky than MongoDB. It trades about -0.08 of its potential returns per unit of risk. MongoDB is currently generating about -0.08 per unit of risk. If you would invest  429.00  in Stitch Fix on December 29, 2024 and sell it today you would lose (89.00) from holding Stitch Fix or give up 20.75% of portfolio value over 90 days.

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

Stitch Fix  vs.  MongoDB

Stitch Fix

Risk-Adjusted Performance

Very Weak

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

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 April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Stitch Fix and MongoDB

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

The idea behind Stitch Fix and MongoDB 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.