Correlation Between JMT Network and Land

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

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

Diversification Opportunities for JMT Network and Land

0.3

Correlation Coefficient

JMT Network  Land

Weak diversification

The 3 months correlation between JMT and Land is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding JMT Network Services and Land and Houses in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Land and Houses and JMT Network 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 JMT Network Services are associated (or correlated) with Land. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Land and Houses has no effect on the direction of JMT Network i.e., JMT Network and Land go up and down completely randomly.

Pair Corralation between JMT Network and Land

Assuming the 90 days trading horizon JMT Network Services is expected to under-perform the Land. In addition to that, JMT Network is 2.44 times more volatile than Land and Houses. It trades about -0.07 of its total potential returns per unit of risk. Land and Houses is currently generating about 0.06 per unit of volatility. If you would invest  735.00  in Land and Houses on February 1, 2024 and sell it today you would earn a total of  10.00  from holding Land and Houses or generate 1.36% return on investment over 90 days.

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

JMT Network Services  vs.  Land and Houses

JMT Network Services

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JMT Network Services are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite quite weak basic indicators, JMT Network may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Land and Houses

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Land and Houses has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent fundamental drivers, Land is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with JMT Network and Land

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

The idea behind JMT Network Services and Land and Houses 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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.