Correlation Between Descartes Systems and Jamf Holding

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

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

Diversification Opportunities for Descartes Systems and Jamf Holding

-0.79

Correlation Coefficient

Descartes Systems  Jamf Holding

Pay attention - limited upside

The 3 months correlation between Descartes and Jamf is -0.79. Overlapping area represents the amount of risk that can be diversified away by holding Descartes Systems Group and Jamf Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jamf Holding and Descartes Systems 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 Descartes Systems Group are associated (or correlated) with Jamf Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jamf Holding has no effect on the direction of Descartes Systems i.e., Descartes Systems and Jamf Holding go up and down completely randomly.

Pair Corralation between Descartes Systems and Jamf Holding

Given the investment horizon of 90 days Descartes Systems is expected to generate 7.8 times less return on investment than Jamf Holding. But when comparing it to its historical volatility, Descartes Systems Group is 1.64 times less risky than Jamf Holding. It trades about 0.01 of its potential returns per unit of risk. Jamf Holding is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest  1,436  in Jamf Holding on September 22, 2024 and sell it today you would earn a total of  34.00  from holding Jamf Holding or generate 2.37% return on investment over 90 days.

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

Descartes Systems Group  vs.  Jamf Holding

Descartes Systems

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Descartes Systems Group are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. In spite of fairly abnormal technical and fundamental indicators, Descartes Systems may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Jamf Holding

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jamf Holding has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Etf's primary indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the Exchange Traded Fund stockholders.

Pair Trading with Descartes Systems and Jamf Holding

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

The idea behind Descartes Systems Group and Jamf Holding 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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.