Correlation Between Duolingo and Jamf Holding
Can any of the company-specific risk be diversified away by investing in both Duolingo 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 Duolingo and Jamf Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Duolingo and Jamf Holding, you can compare the effects of market volatilities on Duolingo 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 Duolingo with a short position of Jamf Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Duolingo and Jamf Holding.
Diversification Opportunities for Duolingo and Jamf Holding
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Duolingo and Jamf is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding Duolingo and Jamf Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jamf Holding and Duolingo 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 Duolingo 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 Duolingo i.e., Duolingo and Jamf Holding go up and down completely randomly.
Pair Corralation between Duolingo and Jamf Holding
Given the investment horizon of 90 days Duolingo is expected to generate 1.12 times more return on investment than Jamf Holding. However, Duolingo is 1.12 times more volatile than Jamf Holding. It trades about 0.33 of its potential returns per unit of risk. Jamf Holding is currently generating about -0.23 per unit of risk. If you would invest 29,024 in Duolingo on August 27, 2024 and sell it today you would earn a total of 5,776 from holding Duolingo or generate 19.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Duolingo vs. Jamf Holding
Performance |
| Timeline |
| Duolingo |
| Jamf Holding |
Duolingo and Jamf Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Duolingo and Jamf Holding
The main advantage of trading using opposite Duolingo and Jamf Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Duolingo 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 Duolingo 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.| Jamf Holding vs. SimilarWeb | Jamf Holding vs. Expensify | Jamf Holding vs. CS Disco LLC | Jamf Holding vs. Riskified |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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