Correlation Between Jfrog and 512807AW8

Can any of the company-specific risk be diversified away by investing in both Jfrog and 512807AW8 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 512807AW8 into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jfrog and LAM RESEARCH PORATION, you can compare the effects of market volatilities on Jfrog and 512807AW8 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 512807AW8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jfrog and 512807AW8.

Diversification Opportunities for Jfrog and 512807AW8

0.27

Correlation Coefficient

Jfrog  512807AW8

Modest diversification

The 3 months correlation between Jfrog and 512807AW8 is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Jfrog and LAM RESEARCH PORATION in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LAM RESEARCH PORATION 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 512807AW8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LAM RESEARCH PORATION has no effect on the direction of Jfrog i.e., Jfrog and 512807AW8 go up and down completely randomly.

Pair Corralation between Jfrog and 512807AW8

Given the investment horizon of 90 days Jfrog is expected to generate 1.32 times more return on investment than 512807AW8. However, Jfrog is 1.32 times more volatile than LAM RESEARCH PORATION. It trades about 0.14 of its potential returns per unit of risk. LAM RESEARCH PORATION is currently generating about 0.07 per unit of risk. If you would invest  2,932  in Jfrog on October 26, 2024 and sell it today you would earn a total of  518.00  from holding Jfrog or generate 17.67% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	93.22%
Values	Daily Returns

Jfrog  vs.  LAM RESEARCH PORATION

Jfrog

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jfrog are ranked lower than 10 (%) 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.

LAM RESEARCH PORATION

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in LAM RESEARCH PORATION are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite somewhat unfluctuating basic indicators, 512807AW8 may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jfrog and 512807AW8

The main advantage of trading using opposite Jfrog and 512807AW8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jfrog position performs unexpectedly, 512807AW8 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 512807AW8 will offset losses from the drop in 512807AW8's long position.

The idea behind Jfrog and LAM RESEARCH PORATION 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 Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.