Correlation Between H2O Retailing and MongoDB

Can any of the company-specific risk be diversified away by investing in both H2O Retailing 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 H2O Retailing and MongoDB into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between H2O Retailing and MongoDB, you can compare the effects of market volatilities on H2O Retailing 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 H2O Retailing with a short position of MongoDB. Check out your portfolio center. Please also check ongoing floating volatility patterns of H2O Retailing and MongoDB.

Diversification Opportunities for H2O Retailing and MongoDB

-0.39

Correlation Coefficient

H2O Retailing  MongoDB

Very good diversification

The 3 months correlation between H2O and MongoDB is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding H2O Retailing and MongoDB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MongoDB and H2O Retailing 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 H2O Retailing 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 H2O Retailing i.e., H2O Retailing and MongoDB go up and down completely randomly.

Pair Corralation between H2O Retailing and MongoDB

Assuming the 90 days horizon H2O Retailing is expected to under-perform the MongoDB. But the stock apears to be less risky and, when comparing its historical volatility, H2O Retailing is 1.47 times less risky than MongoDB. The stock trades about -0.03 of its potential returns per unit of risk. The MongoDB is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest  15,190  in MongoDB on April 24, 2025 and sell it today you would earn a total of  4,146  from holding MongoDB or generate 27.29% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	98.44%
Values	Daily Returns

H2O Retailing  vs.  MongoDB

H2O Retailing

Risk-Adjusted Performance

Very Weak

Over the last 90 days H2O Retailing has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, H2O Retailing is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

MongoDB

Risk-Adjusted Performance

Good

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

Pair Trading with H2O Retailing and MongoDB

The main advantage of trading using opposite H2O Retailing and MongoDB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if H2O Retailing 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 H2O Retailing 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 Stocks Directory module to find actively traded stocks across global markets.