Correlation Between Jyske Invest and BankInvest Hojrentelande

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Can any of the company-specific risk be diversified away by investing in both Jyske Invest and BankInvest Hojrentelande 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 BankInvest Hojrentelande into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jyske Invest Nye and BankInvest Hojrentelande, you can compare the effects of market volatilities on Jyske Invest and BankInvest Hojrentelande 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 BankInvest Hojrentelande. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Invest and BankInvest Hojrentelande.

Diversification Opportunities for Jyske Invest and BankInvest Hojrentelande

0.88
  Correlation Coefficient

Very poor diversification

The 3 months correlation between Jyske and BankInvest is 0.88. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Invest Nye and BankInvest Hojrentelande in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Hojrentelande 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 Nye are associated (or correlated) with BankInvest Hojrentelande. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Hojrentelande has no effect on the direction of Jyske Invest i.e., Jyske Invest and BankInvest Hojrentelande go up and down completely randomly.

Pair Corralation between Jyske Invest and BankInvest Hojrentelande

Assuming the 90 days trading horizon Jyske Invest Nye is expected to generate 1.15 times more return on investment than BankInvest Hojrentelande. However, Jyske Invest is 1.15 times more volatile than BankInvest Hojrentelande. It trades about 0.04 of its potential returns per unit of risk. BankInvest Hojrentelande is currently generating about 0.0 per unit of risk. If you would invest  9,822  in Jyske Invest Nye on October 25, 2024 and sell it today you would earn a total of  86.00  from holding Jyske Invest Nye or generate 0.88% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthStrong
Accuracy98.33%
ValuesDaily Returns

Jyske Invest Nye  vs.  BankInvest Hojrentelande

 Performance 
       Timeline  
Jyske Invest Nye 

Risk-Adjusted Performance

3 of 100

 
Weak
 
Strong
Insignificant
Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Invest Nye are ranked lower than 3 (%) 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 latest stock price disturbance, may contribute to short-term losses for the investors.
BankInvest Hojrentelande 

Risk-Adjusted Performance

0 of 100

 
Weak
 
Strong
Very Weak
Over the last 90 days BankInvest Hojrentelande has generated negative risk-adjusted returns adding no value to fund investors. Despite somewhat strong primary indicators, BankInvest Hojrentelande is not utilizing all of its potentials. The latest stock price disturbance, may contribute to short-term losses for the investors.

Jyske Invest and BankInvest Hojrentelande Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Jyske Invest and BankInvest Hojrentelande

The main advantage of trading using opposite Jyske Invest and BankInvest Hojrentelande positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jyske Invest position performs unexpectedly, BankInvest Hojrentelande 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 BankInvest Hojrentelande will offset losses from the drop in BankInvest Hojrentelande's long position.
The idea behind Jyske Invest Nye and BankInvest Hojrentelande 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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