Correlation Between Bigcommerce Holdings and Jfrog

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

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

Diversification Opportunities for Bigcommerce Holdings and Jfrog

0.47

Correlation Coefficient

Bigcommerce Holdings  Jfrog

Very weak diversification

The 3 months correlation between Bigcommerce and Jfrog is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Bigcommerce Holdings and Jfrog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jfrog and Bigcommerce Holdings 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 Bigcommerce Holdings are associated (or correlated) with Jfrog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jfrog has no effect on the direction of Bigcommerce Holdings i.e., Bigcommerce Holdings and Jfrog go up and down completely randomly.

Pair Corralation between Bigcommerce Holdings and Jfrog

Given the investment horizon of 90 days Bigcommerce Holdings is expected to under-perform the Jfrog. But the stock apears to be less risky and, when comparing its historical volatility, Bigcommerce Holdings is 1.04 times less risky than Jfrog. The stock trades about -0.01 of its potential returns per unit of risk. The Jfrog is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  3,106  in Jfrog on September 1, 2024 and sell it today you would earn a total of  9.00  from holding Jfrog or generate 0.29% return on investment over 90 days.

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

Bigcommerce Holdings  vs.  Jfrog

Bigcommerce Holdings

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Bigcommerce Holdings are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating technical and fundamental indicators, Bigcommerce Holdings exhibited solid returns over the last few months and may actually be approaching a breakup point.

Jfrog

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jfrog are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Jfrog reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Bigcommerce Holdings and Jfrog

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

The idea behind Bigcommerce Holdings and Jfrog 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.