Correlation Between Sprout Social and Couchbase

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

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

Diversification Opportunities for Sprout Social and Couchbase

-0.65

Correlation Coefficient

Sprout Social  Couchbase

Excellent diversification

The 3 months correlation between Sprout and Couchbase is -0.65. Overlapping area represents the amount of risk that can be diversified away by holding Sprout Social and Couchbase in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Couchbase and Sprout Social 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 Sprout Social 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 Sprout Social i.e., Sprout Social and Couchbase go up and down completely randomly.

Pair Corralation between Sprout Social and Couchbase

Considering the 90-day investment horizon Sprout Social is expected to under-perform the Couchbase. But the stock apears to be less risky and, when comparing its historical volatility, Sprout Social is 1.57 times less risky than Couchbase. The stock trades about -0.35 of its potential returns per unit of risk. The Couchbase is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  1,827  in Couchbase on May 15, 2025 and sell it today you would earn a total of  607.00  from holding Couchbase or generate 33.22% return on investment over 90 days.

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

Sprout Social  vs.  Couchbase

Sprout Social

Risk-Adjusted Performance

Weakest

Over the last 90 days Sprout Social has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in September 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Couchbase

Risk-Adjusted Performance

Fair

Compared to the overall equity markets, risk-adjusted returns on investments in Couchbase are ranked lower than 10 (%) 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 Sprout Social and Couchbase

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

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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.