Correlation Between GM and Jamf Holding
Can any of the company-specific risk be diversified away by investing in both GM 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 GM and Jamf Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between General Motors and Jamf Holding, you can compare the effects of market volatilities on GM 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 GM with a short position of Jamf Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of GM and Jamf Holding.
Diversification Opportunities for GM and Jamf Holding
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between GM and Jamf is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding General Motors and Jamf Holding in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jamf Holding and GM 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 General Motors 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 GM i.e., GM and Jamf Holding go up and down completely randomly.
Pair Corralation between GM and Jamf Holding
Allowing for the 90-day total investment horizon General Motors is expected to generate 0.72 times more return on investment than Jamf Holding. However, General Motors is 1.39 times less risky than Jamf Holding. It trades about -0.14 of its potential returns per unit of risk. Jamf Holding is currently generating about -0.31 per unit of risk. If you would invest 4,836 in General Motors on January 4, 2025 and sell it today you would lose (418.00) from holding General Motors or give up 8.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
General Motors vs. Jamf Holding
Performance |
| Timeline |
| General Motors |
| Jamf Holding |
GM and Jamf Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GM and Jamf Holding
The main advantage of trading using opposite GM and Jamf Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GM 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 General Motors 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. Paycor HCM | Jamf Holding vs. Enfusion | Jamf Holding vs. E2open Parent Holdings | Jamf Holding vs. Pegasystems |
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 Latest Portfolios module to quick portfolio dashboard that showcases your latest portfolios.
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