Correlation Between JMT Network and Carabao Group
Can any of the company-specific risk be diversified away by investing in both JMT Network and Carabao Group 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 Carabao Group 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 Carabao Group Public, you can compare the effects of market volatilities on JMT Network and Carabao Group 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 Carabao Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of JMT Network and Carabao Group.
Diversification Opportunities for JMT Network and Carabao Group
0.49 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between JMT and Carabao is 0.49. Overlapping area represents the amount of risk that can be diversified away by holding JMT Network Services and Carabao Group Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Carabao Group Public 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 Carabao Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Carabao Group Public has no effect on the direction of JMT Network i.e., JMT Network and Carabao Group go up and down completely randomly.
Pair Corralation between JMT Network and Carabao Group
Assuming the 90 days trading horizon JMT Network Services is expected to generate 1.66 times more return on investment than Carabao Group. However, JMT Network is 1.66 times more volatile than Carabao Group Public. It trades about -0.02 of its potential returns per unit of risk. Carabao Group Public is currently generating about -0.07 per unit of risk. If you would invest 1,990 in JMT Network Services on September 1, 2024 and sell it today you would lose (60.00) from holding JMT Network Services or give up 3.02% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
JMT Network Services vs. Carabao Group Public
Performance |
| Timeline |
| JMT Network Services |
| Carabao Group Public |
JMT Network and Carabao Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with JMT Network and Carabao Group
The main advantage of trading using opposite JMT Network and Carabao Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if JMT Network position performs unexpectedly, Carabao Group 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 Carabao Group will offset losses from the drop in Carabao Group's long position.| JMT Network vs. Gulf Energy Development | JMT Network vs. Energy Absolute Public | JMT Network vs. WHA Public | JMT Network vs. Bangkok Expressway and |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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