Correlation Between Informatica and Couchbase

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

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

Diversification Opportunities for Informatica and Couchbase

0.77

Correlation Coefficient

Informatica  Couchbase

Poor diversification

The 3 months correlation between Informatica and Couchbase is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Informatica and Couchbase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Couchbase and Informatica 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 Informatica are associated (or correlated) with Couchbase. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Couchbase has no effect on the direction of Informatica i.e., Informatica and Couchbase go up and down completely randomly.

Pair Corralation between Informatica and Couchbase

Given the investment horizon of 90 days Informatica is expected to generate 1.31 times less return on investment than Couchbase. But when comparing it to its historical volatility, Informatica is 1.63 times less risky than Couchbase. It trades about 0.23 of its potential returns per unit of risk. Couchbase is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  1,613  in Couchbase on April 23, 2025 and sell it today you would earn a total of  815.00  from holding Couchbase or generate 50.53% return on investment over 90 days.

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

Informatica  vs.  Couchbase

Informatica

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Informatica are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating technical and fundamental indicators, Informatica sustained solid returns over the last few months and may actually be approaching a breakup point.

Couchbase

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Couchbase are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating basic indicators, Couchbase exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Informatica and Couchbase

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

The idea behind Informatica and Couchbase 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.