Correlation Between KCE Electronics and JMT Network
Can any of the company-specific risk be diversified away by investing in both KCE Electronics and JMT Network 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 KCE Electronics and JMT Network into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KCE Electronics Public and JMT Network Services, you can compare the effects of market volatilities on KCE Electronics and JMT Network 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 KCE Electronics with a short position of JMT Network. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCE Electronics and JMT Network.
Diversification Opportunities for KCE Electronics and JMT Network
-0.13 | Correlation Coefficient |
Good diversification
The 3 months correlation between KCE and JMT is -0.13. Overlapping area represents the amount of risk that can be diversified away by holding KCE Electronics Public and JMT Network Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on JMT Network Services and KCE Electronics 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 KCE Electronics Public are associated (or correlated) with JMT Network. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of JMT Network Services has no effect on the direction of KCE Electronics i.e., KCE Electronics and JMT Network go up and down completely randomly.
Pair Corralation between KCE Electronics and JMT Network
Assuming the 90 days trading horizon KCE Electronics Public is expected to under-perform the JMT Network. In addition to that, KCE Electronics is 1.18 times more volatile than JMT Network Services. It trades about -0.38 of its total potential returns per unit of risk. JMT Network Services is currently generating about -0.12 per unit of volatility. If you would invest 1,980 in JMT Network Services on August 25, 2024 and sell it today you would lose (180.00) from holding JMT Network Services or give up 9.09% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCE Electronics Public vs. JMT Network Services
Performance |
| Timeline |
| KCE Electronics Public |
| JMT Network Services |
KCE Electronics and JMT Network Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCE Electronics and JMT Network
The main advantage of trading using opposite KCE Electronics and JMT Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCE Electronics position performs unexpectedly, JMT Network 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 JMT Network will offset losses from the drop in JMT Network's long position.| KCE Electronics vs. AP Public | KCE Electronics vs. Jasmine International Public | KCE Electronics vs. Asia Plus Group | KCE Electronics vs. Bangkok Aviation Fuel |
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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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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