Correlation Between JMT Network and Saksiam Leasing

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

Diversification Opportunities for JMT Network and Saksiam Leasing

0.4

Correlation Coefficient

JMT Network  Saksiam Leasing

Very weak diversification

The 3 months correlation between JMT and Saksiam is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding JMT Network Services and Saksiam Leasing Public in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Saksiam 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 Saksiam Leasing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Saksiam Leasing Public has no effect on the direction of JMT Network i.e., JMT Network and Saksiam Leasing go up and down completely randomly.

Pair Corralation between JMT Network and Saksiam Leasing

Assuming the 90 days trading horizon JMT Network Services is expected to generate 1.58 times more return on investment than Saksiam Leasing. However, JMT Network is 1.58 times more volatile than Saksiam Leasing Public. It trades about 0.03 of its potential returns per unit of risk. Saksiam Leasing Public is currently generating about -0.02 per unit of risk. If you would invest  1,510  in JMT Network Services on October 13, 2024 and sell it today you would earn a total of  100.00  from holding JMT Network Services or generate 6.62% return on investment over 90 days.

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

JMT Network Services  vs.  Saksiam Leasing Public

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.

Saksiam Leasing Public

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Saksiam Leasing Public has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent forward-looking signals, Saksiam Leasing is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with JMT Network and Saksiam Leasing

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

The idea behind JMT Network Services and Saksiam 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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.