Correlation Between Jyske Invest and Djurslands Bank

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

Diversification Opportunities for Jyske Invest and Djurslands Bank

-0.44

Correlation Coefficient

Jyske Invest  Djurslands Bank

Very good diversification

The 3 months correlation between Jyske and Djurslands is -0.44. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Invest Nye and Djurslands Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Djurslands Bank 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 Djurslands Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Djurslands Bank has no effect on the direction of Jyske Invest i.e., Jyske Invest and Djurslands Bank go up and down completely randomly.

Pair Corralation between Jyske Invest and Djurslands Bank

Assuming the 90 days trading horizon Jyske Invest is expected to generate 1.36 times less return on investment than Djurslands Bank. But when comparing it to its historical volatility, Jyske Invest Nye is 2.52 times less risky than Djurslands Bank. It trades about 0.06 of its potential returns per unit of risk. Djurslands Bank is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest  52,000  in Djurslands Bank on September 13, 2024 and sell it today you would earn a total of  1,000.00  from holding Djurslands Bank or generate 1.92% return on investment over 90 days.

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

Jyske Invest Nye  vs.  Djurslands Bank

Jyske Invest Nye

Risk-Adjusted Performance

5 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Invest Nye are ranked lower than 5 (%) 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.

Djurslands Bank

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Djurslands Bank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Djurslands Bank is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Jyske Invest and Djurslands Bank

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

The idea behind Jyske Invest Nye and Djurslands Bank 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.

Check out your portfolio center.

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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.