Correlation Between Cadence Bancorp and Jfrog

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

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

Diversification Opportunities for Cadence Bancorp and Jfrog

0.0

Correlation Coefficient

Cadence Bancorp  Jfrog

Pay attention - limited upside

The 3 months correlation between Cadence and Jfrog is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Cadence Bancorp and Jfrog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jfrog and Cadence Bancorp 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 Cadence Bancorp 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 Cadence Bancorp i.e., Cadence Bancorp and Jfrog go up and down completely randomly.

Pair Corralation between Cadence Bancorp and Jfrog

Given the investment horizon of 90 days Cadence Bancorp is expected to under-perform the Jfrog. But the stock apears to be less risky and, when comparing its historical volatility, Cadence Bancorp is 1.35 times less risky than Jfrog. The stock trades about -0.08 of its potential returns per unit of risk. The Jfrog is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest  3,086  in Jfrog on December 20, 2024 and sell it today you would earn a total of  341.00  from holding Jfrog or generate 11.05% return on investment over 90 days.

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

Cadence Bancorp  vs.  Jfrog

Cadence Bancorp

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cadence Bancorp has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's fundamental indicators remain sound and the latest tumult on Wall Street may also be a sign of longer-term gains for the firm shareholders.

Jfrog

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jfrog are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Jfrog reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cadence Bancorp and Jfrog

The main advantage of trading using opposite Cadence Bancorp and Jfrog positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cadence Bancorp 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 Cadence Bancorp 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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.