Correlation Between Cal Comp and JMT Network

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

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

Diversification Opportunities for Cal Comp and JMT Network

-0.3

Correlation Coefficient

Cal Comp  JMT Network

Very good diversification

The 3 months correlation between Cal and JMT is -0.3. Overlapping area represents the amount of risk that can be diversified away by holding Cal Comp 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 Cal Comp 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 Cal Comp 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 Cal Comp i.e., Cal Comp and JMT Network go up and down completely randomly.

Pair Corralation between Cal Comp and JMT Network

Assuming the 90 days trading horizon Cal Comp Electronics Public is expected to generate 0.77 times more return on investment than JMT Network. However, Cal Comp Electronics Public is 1.29 times less risky than JMT Network. It trades about -0.13 of its potential returns per unit of risk. JMT Network Services is currently generating about -0.2 per unit of risk. If you would invest  985.00  in Cal Comp Electronics Public on October 24, 2024 and sell it today you would lose (110.00) from holding Cal Comp Electronics Public or give up 11.17% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	100.0%
Values	Daily Returns

Cal Comp Electronics Public  vs.  JMT Network Services

Cal Comp Electronics

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Cal Comp Electronics Public are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite quite conflicting forward-looking signals, Cal Comp disclosed solid returns over the last few months and may actually be approaching a breakup point.

JMT Network Services

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days JMT Network Services has generated negative risk-adjusted returns adding no value to investors with long positions. Despite weak performance in the last few months, the Stock's basic indicators remain quite persistent which may send shares a bit higher in February 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with Cal Comp and JMT Network

The main advantage of trading using opposite Cal Comp and JMT Network positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cal Comp 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 Cal Comp Electronics Public 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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.