Correlation Between Rackspace Technology and MongoDB

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

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

Diversification Opportunities for Rackspace Technology and MongoDB

0.32

Correlation Coefficient

Rackspace Technology  MongoDB

Weak diversification

The 3 months correlation between Rackspace and MongoDB is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Rackspace Technology and MongoDB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MongoDB and Rackspace Technology 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 Rackspace Technology 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 Rackspace Technology i.e., Rackspace Technology and MongoDB go up and down completely randomly.

Pair Corralation between Rackspace Technology and MongoDB

Considering the 90-day investment horizon Rackspace Technology is expected to generate 1.18 times less return on investment than MongoDB. In addition to that, Rackspace Technology is 1.66 times more volatile than MongoDB. It trades about 0.05 of its total potential returns per unit of risk. MongoDB is currently generating about 0.09 per unit of volatility. If you would invest  18,845  in MongoDB on May 28, 2025 and sell it today you would earn a total of  2,999  from holding MongoDB or generate 15.91% return on investment over 90 days.

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

Rackspace Technology  vs.  MongoDB

Rackspace Technology

Risk-Adjusted Performance

Mild

Compared to the overall equity markets, risk-adjusted returns on investments in Rackspace Technology are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Rackspace Technology unveiled solid returns over the last few months and may actually be approaching a breakup point.

MongoDB

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in MongoDB are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite somewhat uncertain fundamental indicators, MongoDB sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Rackspace Technology and MongoDB

The main advantage of trading using opposite Rackspace Technology and MongoDB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Rackspace Technology 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 Rackspace Technology 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.