Correlation Between Coloplast and Jyske Invest

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

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

Diversification Opportunities for Coloplast and Jyske Invest

0.39

Correlation Coefficient

Coloplast  Jyske Invest

Weak diversification

The 3 months correlation between Coloplast and Jyske is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Coloplast 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 Coloplast 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 Coloplast 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 Coloplast i.e., Coloplast and Jyske Invest go up and down completely randomly.

Pair Corralation between Coloplast and Jyske Invest

Assuming the 90 days trading horizon Coloplast AS is expected to under-perform the Jyske Invest. In addition to that, Coloplast is 1.03 times more volatile than Jyske Invest Nye. It trades about -0.1 of its total potential returns per unit of risk. Jyske Invest Nye is currently generating about -0.02 per unit of volatility. If you would invest  27,950  in Jyske Invest Nye on December 30, 2024 and sell it today you would lose (480.00) from holding Jyske Invest Nye or give up 1.72% of portfolio value over 90 days.

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

Coloplast AS  vs.  Jyske Invest Nye

Coloplast AS

Risk-Adjusted Performance

Very Weak

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

Jyske Invest Nye

Risk-Adjusted Performance

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 quite persistent basic indicators, Jyske Invest 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 Coloplast and Jyske Invest

The main advantage of trading using opposite Coloplast and Jyske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coloplast 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 Coloplast 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.