Correlation Between JMT Network and G Capital

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

Diversification Opportunities for JMT Network and G Capital

-0.1

Correlation Coefficient

JMT Network  G Capital

Good diversification

The 3 months correlation between JMT and GCAP is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding JMT Network Services and G Capital Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on G Capital 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 G Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of G Capital Public has no effect on the direction of JMT Network i.e., JMT Network and G Capital go up and down completely randomly.

Pair Corralation between JMT Network and G Capital

Assuming the 90 days trading horizon JMT Network is expected to generate 18.79 times less return on investment than G Capital. But when comparing it to its historical volatility, JMT Network Services is 20.19 times less risky than G Capital. It trades about 0.08 of its potential returns per unit of risk. G Capital Public is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  55.00  in G Capital Public on September 29, 2024 and sell it today you would lose (23.00) from holding G Capital Public or give up 41.82% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.19%
Values	Daily Returns

JMT Network Services  vs.  G Capital Public

JMT Network Services

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in JMT Network Services are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, JMT Network is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

G Capital Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days G Capital Public 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 forward-looking signals remain quite persistent which may send shares a bit higher in January 2025. The latest mess may also be a sign of long-standing up-swing for the company institutional investors.

Pair Trading with JMT Network and G Capital

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

The idea behind JMT Network Services and G Capital 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.