Correlation Between Jfrog and Goldman Sachs

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

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

Diversification Opportunities for Jfrog and Goldman Sachs

0.7

Correlation Coefficient

Jfrog  Goldman Sachs

Poor diversification

The 3 months correlation between Jfrog and Goldman is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Jfrog and Goldman Sachs Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Goldman Sachs Group 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 Goldman Sachs. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Goldman Sachs Group has no effect on the direction of Jfrog i.e., Jfrog and Goldman Sachs go up and down completely randomly.

Pair Corralation between Jfrog and Goldman Sachs

Given the investment horizon of 90 days Jfrog is expected to generate 1.23 times more return on investment than Goldman Sachs. However, Jfrog is 1.23 times more volatile than Goldman Sachs Group. It trades about 0.09 of its potential returns per unit of risk. Goldman Sachs Group is currently generating about 0.01 per unit of risk. If you would invest  3,056  in Jfrog on December 19, 2024 and sell it today you would earn a total of  336.00  from holding Jfrog or generate 10.99% return on investment over 90 days.

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

Jfrog  vs.  Goldman Sachs Group

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.

Goldman Sachs Group

Risk-Adjusted Performance

Very Weak

Over the last 90 days Goldman Sachs Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Goldman Sachs is not utilizing all of its potentials. The newest stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Jfrog and Goldman Sachs

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

The idea behind Jfrog and Goldman Sachs Group 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.