Correlation Between Cessatech and Jyske Bank

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

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

Diversification Opportunities for Cessatech and Jyske Bank

-0.7

Correlation Coefficient

Cessatech  Jyske Bank

Excellent diversification

The 3 months correlation between Cessatech and Jyske is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Cessatech AS and Jyske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jyske Bank AS and Cessatech 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 Cessatech AS are associated (or correlated) with Jyske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jyske Bank AS has no effect on the direction of Cessatech i.e., Cessatech and Jyske Bank go up and down completely randomly.

Pair Corralation between Cessatech and Jyske Bank

Assuming the 90 days trading horizon Cessatech AS is expected to under-perform the Jyske Bank. In addition to that, Cessatech is 2.9 times more volatile than Jyske Bank AS. It trades about -0.09 of its total potential returns per unit of risk. Jyske Bank AS is currently generating about 0.18 per unit of volatility. If you would invest  50,900  in Jyske Bank AS on December 25, 2024 and sell it today you would earn a total of  7,650  from holding Jyske Bank AS or generate 15.03% return on investment over 90 days.

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

Cessatech AS  vs.  Jyske Bank AS

Cessatech AS

Risk-Adjusted Performance

Very Weak

Over the last 90 days Cessatech AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unsteady performance in the last few months, the Stock's fundamental indicators remain rather sound which may send shares a bit higher in April 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Jyske Bank AS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Bank AS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Jyske Bank displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Cessatech and Jyske Bank

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

The idea behind Cessatech AS and Jyske Bank AS 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .