Correlation Between Pegasystems and Jamf Holding

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

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

Diversification Opportunities for Pegasystems and Jamf Holding

0.2

Correlation Coefficient

Pegasystems  Jamf Holding

Modest diversification

The 3 months correlation between Pegasystems and Jamf is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding Pegasystems and Jamf Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jamf Holding and Pegasystems 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 Pegasystems 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 Pegasystems i.e., Pegasystems and Jamf Holding go up and down completely randomly.

Pair Corralation between Pegasystems and Jamf Holding

Given the investment horizon of 90 days Pegasystems is expected to generate 8.38 times less return on investment than Jamf Holding. In addition to that, Pegasystems is 1.77 times more volatile than Jamf Holding. It trades about 0.01 of its total potential returns per unit of risk. Jamf Holding is currently generating about 0.1 per unit of volatility. If you would invest  1,415  in Jamf Holding on November 20, 2024 and sell it today you would earn a total of  151.00  from holding Jamf Holding or generate 10.67% return on investment over 90 days.

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

Pegasystems  vs.  Jamf Holding

Pegasystems

Risk-Adjusted Performance

Weak

Over the last 90 days Pegasystems has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong technical and fundamental indicators, Pegasystems is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Jamf Holding

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jamf Holding are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak primary indicators, Jamf Holding may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Pegasystems and Jamf Holding

The main advantage of trading using opposite Pegasystems and Jamf Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pegasystems 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 Pegasystems 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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.