Correlation Between Jfrog and HONEYWELL

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

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

Diversification Opportunities for Jfrog and HONEYWELL

0.45

Correlation Coefficient

Jfrog  HONEYWELL

Very weak diversification

The 3 months correlation between Jfrog and HONEYWELL is 0.45. Overlapping area represents the amount of risk that can be diversified away by holding Jfrog and HONEYWELL INTERNATIONAL INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HONEYWELL INTERNATIONAL 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 HONEYWELL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HONEYWELL INTERNATIONAL has no effect on the direction of Jfrog i.e., Jfrog and HONEYWELL go up and down completely randomly.

Pair Corralation between Jfrog and HONEYWELL

Given the investment horizon of 90 days Jfrog is expected to generate 1.91 times more return on investment than HONEYWELL. However, Jfrog is 1.91 times more volatile than HONEYWELL INTERNATIONAL INC. It trades about 0.09 of its potential returns per unit of risk. HONEYWELL INTERNATIONAL INC is currently generating about -0.09 per unit of risk. If you would invest  3,049  in Jfrog on December 24, 2024 and sell it today you would earn a total of  349.00  from holding Jfrog or generate 11.45% return on investment over 90 days.

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

Jfrog  vs.  HONEYWELL INTERNATIONAL INC

Jfrog

Risk-Adjusted Performance

OK

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.

HONEYWELL INTERNATIONAL

Risk-Adjusted Performance

Very Weak

Over the last 90 days HONEYWELL INTERNATIONAL INC has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest conflicting performance, the Bond's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for HONEYWELL INTERNATIONAL INC investors.

Pair Trading with Jfrog and HONEYWELL

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

The idea behind Jfrog and HONEYWELL INTERNATIONAL INC 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.