Correlation Between Jyske Invest and Handelsinvest Danmark

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

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

Diversification Opportunities for Jyske Invest and Handelsinvest Danmark

-0.62

Correlation Coefficient

Jyske Invest  Handelsinvest Danmark

Excellent diversification

The 3 months correlation between Jyske and Handelsinvest is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Invest Lange and Handelsinvest Danmark in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Handelsinvest Danmark and Jyske Invest 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 Jyske Invest Lange are associated (or correlated) with Handelsinvest Danmark. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Handelsinvest Danmark has no effect on the direction of Jyske Invest i.e., Jyske Invest and Handelsinvest Danmark go up and down completely randomly.

Pair Corralation between Jyske Invest and Handelsinvest Danmark

Assuming the 90 days trading horizon Jyske Invest Lange is expected to generate 0.49 times more return on investment than Handelsinvest Danmark. However, Jyske Invest Lange is 2.03 times less risky than Handelsinvest Danmark. It trades about 0.08 of its potential returns per unit of risk. Handelsinvest Danmark is currently generating about -0.12 per unit of risk. If you would invest  9,146  in Jyske Invest Lange on September 14, 2024 and sell it today you would earn a total of  176.00  from holding Jyske Invest Lange or generate 1.92% return on investment over 90 days.

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

Jyske Invest Lange  vs.  Handelsinvest Danmark

Jyske Invest Lange

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Invest Lange are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Jyske Invest is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Handelsinvest Danmark

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Handelsinvest Danmark has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound fundamental indicators, Handelsinvest Danmark is not utilizing all of its potentials. The latest stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Jyske Invest and Handelsinvest Danmark

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

The idea behind Jyske Invest Lange and Handelsinvest Danmark 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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.