Correlation Between Jyske Invest and Sparinvest Europa

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

Diversification Opportunities for Jyske Invest and Sparinvest Europa

0.29

Correlation Coefficient

Jyske Invest  Sparinvest Europa

Modest diversification

The 3 months correlation between Jyske and Sparinvest is 0.29. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Invest Nye and Sparinvest Europa Growth in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparinvest Europa Growth 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 Sparinvest Europa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparinvest Europa Growth has no effect on the direction of Jyske Invest i.e., Jyske Invest and Sparinvest Europa go up and down completely randomly.

Pair Corralation between Jyske Invest and Sparinvest Europa

Assuming the 90 days trading horizon Jyske Invest is expected to generate 9.2 times less return on investment than Sparinvest Europa. But when comparing it to its historical volatility, Jyske Invest Nye is 2.13 times less risky than Sparinvest Europa. It trades about 0.08 of its potential returns per unit of risk. Sparinvest Europa Growth is currently generating about 0.37 of returns per unit of risk over similar time horizon. If you would invest  15,946  in Sparinvest Europa Growth on October 26, 2024 and sell it today you would earn a total of  757.00  from holding Sparinvest Europa Growth or generate 4.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Very Weak
Accuracy	94.74%
Values	Daily Returns

Jyske Invest Nye  vs.  Sparinvest Europa Growth

Jyske Invest Nye

Risk-Adjusted Performance

1 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Invest Nye are ranked lower than 1 (%) 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 current stock price disturbance, may contribute to short-term losses for the investors.

Sparinvest Europa Growth

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Sparinvest Europa Growth are ranked lower than 2 (%) of all funds and portfolios of funds over the last 90 days. Despite quite persistent basic indicators, Sparinvest Europa is not utilizing all of its potentials. The latest stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Jyske Invest and Sparinvest Europa

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

The idea behind Jyske Invest Nye and Sparinvest Europa Growth 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..