Correlation Between JMT Network and Amanah Leasing

Can any of the company-specific risk be diversified away by investing in both JMT Network and Amanah Leasing 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 Amanah Leasing 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 Amanah Leasing Public, you can compare the effects of market volatilities on JMT Network and Amanah Leasing 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 Amanah Leasing. Check out your portfolio center. Please also check ongoing floating volatility patterns of JMT Network and Amanah Leasing.

Diversification Opportunities for JMT Network and Amanah Leasing

0.85

Correlation Coefficient

JMT Network  Amanah Leasing

Very poor diversification

The 3 months correlation between JMT and Amanah is 0.85. Overlapping area represents the amount of risk that can be diversified away by holding JMT Network Services and Amanah Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amanah Leasing 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 Amanah Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amanah Leasing Public has no effect on the direction of JMT Network i.e., JMT Network and Amanah Leasing go up and down completely randomly.

Pair Corralation between JMT Network and Amanah Leasing

Assuming the 90 days trading horizon JMT Network Services is expected to under-perform the Amanah Leasing. In addition to that, JMT Network is 1.19 times more volatile than Amanah Leasing Public. It trades about -0.1 of its total potential returns per unit of risk. Amanah Leasing Public is currently generating about -0.06 per unit of volatility. If you would invest  99.00  in Amanah Leasing Public on December 29, 2024 and sell it today you would lose (14.00) from holding Amanah Leasing Public or give up 14.14% of portfolio value over 90 days.

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

JMT Network Services  vs.  Amanah Leasing Public

JMT Network Services

Risk-Adjusted Performance

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 April 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Amanah Leasing Public

Risk-Adjusted Performance

Very Weak

Over the last 90 days Amanah Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with JMT Network and Amanah Leasing

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

The idea behind JMT Network Services and Amanah Leasing Public 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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.