Correlation Between ANSYS and Jfrog

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

By analyzing existing cross correlation between ANSYS Inc and Jfrog, you can compare the effects of market volatilities on ANSYS and Jfrog 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 ANSYS with a short position of Jfrog. Check out your portfolio center. Please also check ongoing floating volatility patterns of ANSYS and Jfrog.

Diversification Opportunities for ANSYS and Jfrog

0.81

Correlation Coefficient

ANSYS  Jfrog

Very poor diversification

The 3 months correlation between ANSYS and Jfrog is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding ANSYS Inc and Jfrog in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jfrog and ANSYS 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 ANSYS Inc are associated (or correlated) with Jfrog. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jfrog has no effect on the direction of ANSYS i.e., ANSYS and Jfrog go up and down completely randomly.

Pair Corralation between ANSYS and Jfrog

Given the investment horizon of 90 days ANSYS is expected to generate 1.65 times less return on investment than Jfrog. But when comparing it to its historical volatility, ANSYS Inc is 1.38 times less risky than Jfrog. It trades about 0.06 of its potential returns per unit of risk. Jfrog is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest  2,839  in Jfrog on September 23, 2024 and sell it today you would earn a total of  247.00  from holding Jfrog or generate 8.7% return on investment over 90 days.

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

ANSYS Inc  vs.  Jfrog

ANSYS Inc

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in ANSYS Inc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, ANSYS is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

Jfrog

Risk-Adjusted Performance

5 of 100

Modest

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

Pair Trading with ANSYS and Jfrog

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

The idea behind ANSYS Inc and Jfrog 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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.