Correlation Between Jeudan and Agat Ejendomme

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

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

Diversification Opportunities for Jeudan and Agat Ejendomme

0.77

Correlation Coefficient

Jeudan  Agat Ejendomme

Poor diversification

The 3 months correlation between Jeudan and Agat is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Jeudan and Agat Ejendomme AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Agat Ejendomme AS and Jeudan 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 Jeudan are associated (or correlated) with Agat Ejendomme. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Agat Ejendomme AS has no effect on the direction of Jeudan i.e., Jeudan and Agat Ejendomme go up and down completely randomly.

Pair Corralation between Jeudan and Agat Ejendomme

Assuming the 90 days trading horizon Jeudan is expected to under-perform the Agat Ejendomme. But the stock apears to be less risky and, when comparing its historical volatility, Jeudan is 1.52 times less risky than Agat Ejendomme. The stock trades about -0.29 of its potential returns per unit of risk. The Agat Ejendomme AS is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest  152.00  in Agat Ejendomme AS on October 7, 2024 and sell it today you would lose (5.00) from holding Agat Ejendomme AS or give up 3.29% of portfolio value over 90 days.

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

Jeudan  vs.  Agat Ejendomme AS

Jeudan

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jeudan has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of weak performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in February 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Agat Ejendomme AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Agat Ejendomme AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unsteady performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Jeudan and Agat Ejendomme

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

The idea behind Jeudan and Agat Ejendomme 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.