Correlation Between MongoDB and Appian Corp

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

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

Diversification Opportunities for MongoDB and Appian Corp

0.9

Correlation Coefficient

MongoDB  Appian Corp

Almost no diversification

The 3 months correlation between MongoDB and Appian is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding MongoDB and Appian Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Appian Corp and MongoDB 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 MongoDB are associated (or correlated) with Appian Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Appian Corp has no effect on the direction of MongoDB i.e., MongoDB and Appian Corp go up and down completely randomly.

Pair Corralation between MongoDB and Appian Corp

Considering the 90-day investment horizon MongoDB is expected to under-perform the Appian Corp. In addition to that, MongoDB is 1.37 times more volatile than Appian Corp. It trades about -0.1 of its total potential returns per unit of risk. Appian Corp is currently generating about -0.02 per unit of volatility. If you would invest  3,470  in Appian Corp on January 27, 2025 and sell it today you would lose (338.00) from holding Appian Corp or give up 9.74% of portfolio value over 90 days.

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

MongoDB  vs.  Appian Corp

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

Appian Corp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Appian Corp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Appian Corp is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with MongoDB and Appian Corp

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

The idea behind MongoDB and Appian Corp 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.