Correlation Between Jfrog and Blackline

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

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

Diversification Opportunities for Jfrog and Blackline

0.86

Correlation Coefficient

Jfrog  Blackline

Very poor diversification

The 3 months correlation between Jfrog and Blackline is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Jfrog and Blackline in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Blackline and Jfrog 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 Jfrog are associated (or correlated) with Blackline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Blackline has no effect on the direction of Jfrog i.e., Jfrog and Blackline go up and down completely randomly.

Pair Corralation between Jfrog and Blackline

Given the investment horizon of 90 days Jfrog is expected to generate 1.37 times less return on investment than Blackline. In addition to that, Jfrog is 1.4 times more volatile than Blackline. It trades about 0.12 of its total potential returns per unit of risk. Blackline is currently generating about 0.23 per unit of volatility. If you would invest  4,851  in Blackline on September 2, 2024 and sell it today you would earn a total of  1,350  from holding Blackline or generate 27.83% return on investment over 90 days.

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

Jfrog  vs.  Blackline

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.

Blackline

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Blackline are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. Despite quite inconsistent essential indicators, Blackline disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jfrog and Blackline

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

The idea behind Jfrog and Blackline 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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.