Correlation Between Jfrog and Enfusion
Can any of the company-specific risk be diversified away by investing in both Jfrog and Enfusion 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 Enfusion into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jfrog and Enfusion, you can compare the effects of market volatilities on Jfrog and Enfusion 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 Enfusion. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jfrog and Enfusion.
Diversification Opportunities for Jfrog and Enfusion
Poor diversification
The 3 months correlation between Jfrog and Enfusion is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Jfrog and Enfusion in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Enfusion 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 Enfusion. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Enfusion has no effect on the direction of Jfrog i.e., Jfrog and Enfusion go up and down completely randomly.
Pair Corralation between Jfrog and Enfusion
Given the investment horizon of 90 days Jfrog is expected to generate 1.31 times more return on investment than Enfusion. However, Jfrog is 1.31 times more volatile than Enfusion. It trades about 0.03 of its potential returns per unit of risk. Enfusion is currently generating about 0.02 per unit of risk. If you would invest 2,317 in Jfrog on September 3, 2024 and sell it today you would earn a total of 798.00 from holding Jfrog or generate 34.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jfrog vs. Enfusion
Performance |
| Timeline |
| Jfrog |
| Enfusion |
Jfrog and Enfusion Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jfrog and Enfusion
The main advantage of trading using opposite Jfrog and Enfusion positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jfrog position performs unexpectedly, Enfusion 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 Enfusion will offset losses from the drop in Enfusion's long position.The idea behind Jfrog and Enfusion 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.| Enfusion vs. ON24 Inc | Enfusion vs. Paycor HCM | Enfusion vs. E2open Parent Holdings | Enfusion vs. Braze Inc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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