Correlation Between Jfrog and BAKER

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

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

Diversification Opportunities for Jfrog and BAKER

-0.21

Correlation Coefficient

Jfrog  BAKER

Very good diversification

The 3 months correlation between Jfrog and BAKER is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Jfrog and BAKER HUGHES A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAKER HUGHES A 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 BAKER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAKER HUGHES A has no effect on the direction of Jfrog i.e., Jfrog and BAKER go up and down completely randomly.

Pair Corralation between Jfrog and BAKER

Given the investment horizon of 90 days Jfrog is expected to generate 0.97 times more return on investment than BAKER. However, Jfrog is 1.04 times less risky than BAKER. It trades about 0.1 of its potential returns per unit of risk. BAKER HUGHES A is currently generating about 0.04 per unit of risk. If you would invest  3,017  in Jfrog on December 23, 2024 and sell it today you would earn a total of  381.00  from holding Jfrog or generate 12.63% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	86.89%
Values	Daily Returns

Jfrog  vs.  BAKER HUGHES A

Jfrog

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jfrog are ranked lower than 7 (%) 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.

BAKER HUGHES A

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in BAKER HUGHES A are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, BAKER is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jfrog and BAKER

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

The idea behind Jfrog and BAKER HUGHES A 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 Bonds Directory module to find actively traded corporate debentures issued by US companies.