Correlation Between Jfrog and Clearwater Analytics

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

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

Diversification Opportunities for Jfrog and Clearwater Analytics

0.44

Correlation Coefficient

Jfrog  Clearwater Analytics

Very weak diversification

The 3 months correlation between Jfrog and Clearwater is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Jfrog and Clearwater Analytics Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clearwater Analytics 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 Clearwater Analytics. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clearwater Analytics has no effect on the direction of Jfrog i.e., Jfrog and Clearwater Analytics go up and down completely randomly.

Pair Corralation between Jfrog and Clearwater Analytics

Given the investment horizon of 90 days Jfrog is expected to generate 0.96 times more return on investment than Clearwater Analytics. However, Jfrog is 1.04 times less risky than Clearwater Analytics. It trades about 0.07 of its potential returns per unit of risk. Clearwater Analytics Holdings is currently generating about -0.02 per unit of risk. If you would invest  2,953  in Jfrog on December 30, 2024 and sell it today you would earn a total of  247.00  from holding Jfrog or generate 8.36% return on investment over 90 days.

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

Jfrog  vs.  Clearwater Analytics Holdings

Jfrog

Risk-Adjusted Performance

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jfrog are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, Jfrog may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Clearwater Analytics

Risk-Adjusted Performance

Very Weak

Over the last 90 days Clearwater Analytics Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Clearwater Analytics is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Jfrog and Clearwater Analytics

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

The idea behind Jfrog and Clearwater Analytics Holdings 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.