Correlation Between BTS Group and JMT Network

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

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

Diversification Opportunities for BTS Group and JMT Network

0.27

Correlation Coefficient

BTS Group  JMT Network

Modest diversification

The 3 months correlation between BTS and JMT is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding BTS Group Holdings 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 BTS Group 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 BTS Group Holdings 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 BTS Group i.e., BTS Group and JMT Network go up and down completely randomly.

Pair Corralation between BTS Group and JMT Network

Assuming the 90 days trading horizon BTS Group Holdings is expected to generate 0.49 times more return on investment than JMT Network. However, BTS Group Holdings is 2.04 times less risky than JMT Network. It trades about 0.32 of its potential returns per unit of risk. JMT Network Services is currently generating about 0.07 per unit of risk. If you would invest  498.00  in BTS Group Holdings on September 5, 2024 and sell it today you would earn a total of  67.00  from holding BTS Group Holdings or generate 13.45% return on investment over 90 days.

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

BTS Group Holdings  vs.  JMT Network Services

BTS Group Holdings

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in BTS Group Holdings are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, BTS Group disclosed solid returns over the last few months and may actually be approaching a breakup point.

JMT Network Services

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in JMT Network Services are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting basic indicators, JMT Network disclosed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with BTS Group and JMT Network

The main advantage of trading using opposite BTS Group and JMT Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BTS Group 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.

The idea behind BTS Group Holdings and JMT Network Services 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.