Correlation Between Jyske Invest and Sparinvest Mellemlange

Can any of the company-specific risk be diversified away by investing in both Jyske Invest and Sparinvest Mellemlange 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 Sparinvest Mellemlange 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 Sparinvest Mellemlange, you can compare the effects of market volatilities on Jyske Invest and Sparinvest Mellemlange 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 Sparinvest Mellemlange. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Invest and Sparinvest Mellemlange.

Diversification Opportunities for Jyske Invest and Sparinvest Mellemlange

0.89

Correlation Coefficient

Jyske Invest  Sparinvest Mellemlange

Very poor diversification

The 3 months correlation between Jyske and Sparinvest is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Invest Lange and Sparinvest Mellemlange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparinvest Mellemlange 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 Sparinvest Mellemlange. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparinvest Mellemlange has no effect on the direction of Jyske Invest i.e., Jyske Invest and Sparinvest Mellemlange go up and down completely randomly.

Pair Corralation between Jyske Invest and Sparinvest Mellemlange

Assuming the 90 days trading horizon Jyske Invest Lange is expected to generate 2.24 times more return on investment than Sparinvest Mellemlange. However, Jyske Invest is 2.24 times more volatile than Sparinvest Mellemlange. It trades about 0.08 of its potential returns per unit of risk. Sparinvest Mellemlange 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 Together
Strength	Strong
Accuracy	100.0%
Values	Daily Returns

Jyske Invest Lange  vs.  Sparinvest Mellemlange

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.

Sparinvest Mellemlange

Risk-Adjusted Performance

9 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Sparinvest Mellemlange are ranked lower than 9 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent basic indicators, Sparinvest Mellemlange 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 Jyske Invest and Sparinvest Mellemlange

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

The idea behind Jyske Invest Lange and Sparinvest Mellemlange 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..