Joseph Effect

AAA

DEFINITION of 'Joseph Effect'

The idea that movements in a time series tend to be part of larger trends and cycles more often than they are completely random. The Joseph Effect is quantified by the Hurst component, where movements fall between a Hurst range of 0 to 1. The term was coined by Benoit Mandelbrot.

INVESTOPEDIA EXPLAINS 'Joseph Effect'

If a series of movements is calculated to be between 0 and 0.5 in the Hurst range, then the movement is larger and more random than what are thought to be normal random movements. If the measure is 0.5, then the movements are thought to be random movements. If it is between 0.5 and 1, the movements are thought to be part of a long-term trend. The term "Joseph Effect" alludes to an Old Testament story about Joseph, where Egypt would experience seven years of feast followed by seven years of famine.

RELATED TERMS
  1. Trend

    The general direction of a market or of the price of an asset. ...
  2. Chartist

    An individual who uses charts or graphs of a security's historical ...
  3. Technical Analysis

    A method of evaluating securities by analyzing statistics generated ...
  4. Bulldog Market

    A nickname for the foreign bond market of the United Kingdom. ...
  5. Compound Annual Growth Rate - CAGR

    The year-over-year growth rate of an investment over a specified ...
  6. Sharing Economy

    An economic model in which individuals are able to borrow or ...
Related Articles
  1. Where's The Market Headed Now?
    Fundamental Analysis

    Where's The Market Headed Now?

  2. Market Reversals And How To Spot Them
    Charts & Patterns

    Market Reversals And How To Spot Them

  3. The Six Things Investors Should Do Now
    Fundamental Analysis

    The Six Things Investors Should Do Now

  4. Day Trading Strategy Steps
    Trading Strategies

    Day Trading Strategy Steps

comments powered by Disqus
Hot Definitions
  1. Days Sales Of Inventory - DSI

    A financial measure of a company's performance that gives investors an idea of how long it takes a company to turn its inventory ...
  2. Accounts Payable - AP

    An accounting entry that represents an entity's obligation to pay off a short-term debt to its creditors. The accounts payable ...
  3. Ratio Analysis

    Quantitative analysis of information contained in a company’s financial statements. Ratio analysis is based on line items ...
  4. Days Payable Outstanding - DPO

    A company's average payable period. Calculated as: ending accounts payable / (cost of sales/number of days).
  5. Net Sales

    The amount of sales generated by a company after the deduction of returns, allowances for damaged or missing goods and any ...
  6. Over The Counter

    A security traded in some context other than on a formal exchange such as the NYSE, TSX, AMEX, etc. The phrase "over-the-counter" ...
Trading Center