Correlation Between Jfrog and Xiaomi Corp

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

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

Diversification Opportunities for Jfrog and Xiaomi Corp

0.24

Correlation Coefficient

Jfrog  Xiaomi Corp

Modest diversification

The 3 months correlation between Jfrog and Xiaomi is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Jfrog and Xiaomi Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Xiaomi Corp 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 Xiaomi Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Xiaomi Corp has no effect on the direction of Jfrog i.e., Jfrog and Xiaomi Corp go up and down completely randomly.

Pair Corralation between Jfrog and Xiaomi Corp

Given the investment horizon of 90 days Jfrog is expected to generate 18.08 times less return on investment than Xiaomi Corp. But when comparing it to its historical volatility, Jfrog is 1.19 times less risky than Xiaomi Corp. It trades about 0.02 of its potential returns per unit of risk. Xiaomi Corp is currently generating about 0.3 of returns per unit of risk over similar time horizon. If you would invest  413.00  in Xiaomi Corp on October 10, 2024 and sell it today you would earn a total of  59.00  from holding Xiaomi Corp or generate 14.29% return on investment over 90 days.

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

Jfrog  vs.  Xiaomi Corp

Jfrog

Risk-Adjusted Performance

3 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jfrog are ranked lower than 3 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, Jfrog is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Xiaomi Corp

Risk-Adjusted Performance

22 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Xiaomi Corp are ranked lower than 22 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak fundamental indicators, Xiaomi Corp reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jfrog and Xiaomi Corp

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

The idea behind Jfrog and Xiaomi Corp 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.

Check out your portfolio center.

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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.