Correlation Between NetApp and MongoDB

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

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

Diversification Opportunities for NetApp and MongoDB

0.13

Correlation Coefficient

NetApp  MongoDB

Average diversification

The 3 months correlation between NetApp and MongoDB is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding NetApp Inc and MongoDB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MongoDB and NetApp 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 NetApp Inc 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 NetApp i.e., NetApp and MongoDB go up and down completely randomly.

Pair Corralation between NetApp and MongoDB

Given the investment horizon of 90 days NetApp Inc is expected to under-perform the MongoDB. But the stock apears to be less risky and, when comparing its historical volatility, NetApp Inc is 2.77 times less risky than MongoDB. The stock trades about -0.02 of its potential returns per unit of risk. The MongoDB is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  21,844  in MongoDB on August 24, 2025 and sell it today you would earn a total of  10,274  from holding MongoDB or generate 47.03% return on investment over 90 days.

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

NetApp Inc  vs.  MongoDB

NetApp Inc

Risk-Adjusted Performance

Weakest

Over the last 90 days NetApp Inc has generated negative risk-adjusted returns adding no value to investors with long positions. Even with relatively invariable basic indicators, NetApp is not utilizing all of its potentials. The recent stock price agitation, may contribute to short-term losses for the retail investors.

MongoDB

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in MongoDB are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak fundamental indicators, MongoDB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with NetApp and MongoDB

The main advantage of trading using opposite NetApp and MongoDB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NetApp 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 NetApp Inc 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.

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.