Correlation Between Worldline and MongoDB

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

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

Diversification Opportunities for Worldline and MongoDB

-0.4

Correlation Coefficient

Worldline  MongoDB

Very good diversification

The 3 months correlation between Worldline and MongoDB is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Worldline SA and MongoDB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MongoDB and Worldline 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 Worldline SA 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 Worldline i.e., Worldline and MongoDB go up and down completely randomly.

Pair Corralation between Worldline and MongoDB

Assuming the 90 days horizon Worldline SA is expected to generate 0.79 times more return on investment than MongoDB. However, Worldline SA is 1.27 times less risky than MongoDB. It trades about 0.15 of its potential returns per unit of risk. MongoDB is currently generating about 0.0 per unit of risk. If you would invest  692.00  in Worldline SA on October 8, 2024 and sell it today you would earn a total of  208.00  from holding Worldline SA or generate 30.06% return on investment over 90 days.

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

Worldline SA  vs.  MongoDB

Worldline SA

Risk-Adjusted Performance

12 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Worldline SA are ranked lower than 12 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Worldline reported solid returns over the last few months and may actually be approaching a breakup point.

MongoDB

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MongoDB has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong fundamental indicators, MongoDB is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Worldline and MongoDB

The main advantage of trading using opposite Worldline and MongoDB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Worldline 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 Worldline SA 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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.