Correlation Between Jfrog and 191216CX6

Can any of the company-specific risk be diversified away by investing in both Jfrog and 191216CX6 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 191216CX6 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jfrog and COCA COLA CO, you can compare the effects of market volatilities on Jfrog and 191216CX6 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 191216CX6. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jfrog and 191216CX6.

Diversification Opportunities for Jfrog and 191216CX6

0.31

Correlation Coefficient

Jfrog  191216CX6

Weak diversification

The 3 months correlation between Jfrog and 191216CX6 is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Jfrog and COCA COLA CO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COCA A CO 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 191216CX6. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COCA A CO has no effect on the direction of Jfrog i.e., Jfrog and 191216CX6 go up and down completely randomly.

Pair Corralation between Jfrog and 191216CX6

Given the investment horizon of 90 days Jfrog is expected to generate 2.34 times less return on investment than 191216CX6. But when comparing it to its historical volatility, Jfrog is 2.45 times less risky than 191216CX6. It trades about 0.24 of its potential returns per unit of risk. COCA COLA CO is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  6,065  in COCA COLA CO on October 24, 2024 and sell it today you would earn a total of  1,061  from holding COCA COLA CO or generate 17.49% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	88.89%
Values	Daily Returns

Jfrog  vs.  COCA COLA CO

Jfrog

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jfrog are ranked lower than 8 (%) 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.

COCA A CO

Risk-Adjusted Performance

6 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in COCA COLA CO are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat fragile basic indicators, 191216CX6 sustained solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jfrog and 191216CX6

The main advantage of trading using opposite Jfrog and 191216CX6 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jfrog position performs unexpectedly, 191216CX6 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 191216CX6 will offset losses from the drop in 191216CX6's long position.

The idea behind Jfrog and COCA COLA CO 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 Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.