Correlation Between Alefarm Brewing and Jyske Invest

Can any of the company-specific risk be diversified away by investing in both Alefarm Brewing and Jyske Invest 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 Alefarm Brewing and Jyske Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Alefarm Brewing AS and Jyske Invest Nye, you can compare the effects of market volatilities on Alefarm Brewing and Jyske Invest 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 Alefarm Brewing with a short position of Jyske Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Alefarm Brewing and Jyske Invest.

Diversification Opportunities for Alefarm Brewing and Jyske Invest

-0.34

Correlation Coefficient

Alefarm Brewing  Jyske Invest

Very good diversification

The 3 months correlation between Alefarm and Jyske is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Alefarm Brewing AS and Jyske Invest Nye in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jyske Invest Nye and Alefarm Brewing 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 Alefarm Brewing AS are associated (or correlated) with Jyske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jyske Invest Nye has no effect on the direction of Alefarm Brewing i.e., Alefarm Brewing and Jyske Invest go up and down completely randomly.

Pair Corralation between Alefarm Brewing and Jyske Invest

Assuming the 90 days trading horizon Alefarm Brewing AS is expected to generate 10.49 times more return on investment than Jyske Invest. However, Alefarm Brewing is 10.49 times more volatile than Jyske Invest Nye. It trades about 0.0 of its potential returns per unit of risk. Jyske Invest Nye is currently generating about 0.04 per unit of risk. If you would invest  222.00  in Alefarm Brewing AS on October 11, 2024 and sell it today you would lose (87.00) from holding Alefarm Brewing AS or give up 39.19% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	99.8%
Values	Daily Returns

Alefarm Brewing AS  vs.  Jyske Invest Nye

Alefarm Brewing AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Alefarm Brewing AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unfluctuating performance in the last few months, the Stock's technical and fundamental indicators remain somewhat strong which may send shares a bit higher in February 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Jyske Invest Nye

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jyske Invest Nye has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong forward indicators, Jyske Invest is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Alefarm Brewing and Jyske Invest

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

The idea behind Alefarm Brewing AS and Jyske Invest Nye 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 Pair Correlation module to compare performance and examine fundamental relationship between any two equity instruments.