Correlation Between Jyske Invest and Sparinvest SICAV

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

Diversification Opportunities for Jyske Invest and Sparinvest SICAV

0.74

Correlation Coefficient

Jyske Invest  Sparinvest SICAV

Poor diversification

The 3 months correlation between Jyske and Sparinvest is 0.74. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Invest Nye and Sparinvest SICAV Procedo in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparinvest SICAV Procedo 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 SICAV. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparinvest SICAV Procedo has no effect on the direction of Jyske Invest i.e., Jyske Invest and Sparinvest SICAV go up and down completely randomly.

Pair Corralation between Jyske Invest and Sparinvest SICAV

Assuming the 90 days trading horizon Jyske Invest Nye is expected to generate 0.81 times more return on investment than Sparinvest SICAV. However, Jyske Invest Nye is 1.23 times less risky than Sparinvest SICAV. It trades about 0.03 of its potential returns per unit of risk. Sparinvest SICAV Procedo is currently generating about -0.01 per unit of risk. If you would invest  9,980  in Jyske Invest Nye on December 4, 2024 and sell it today you would earn a total of  75.00  from holding Jyske Invest Nye or generate 0.75% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	98.33%
Values	Daily Returns

Jyske Invest Nye  vs.  Sparinvest SICAV Procedo

Jyske Invest Nye

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Invest Nye are ranked lower than 2 (%) 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 SICAV Procedo

Risk-Adjusted Performance

Very Weak

Over the last 90 days Sparinvest SICAV Procedo has generated negative risk-adjusted returns adding no value to fund investors. Even with relatively invariable technical and fundamental indicators, Sparinvest SICAV is not utilizing all of its potentials. The latest stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Jyske Invest and Sparinvest SICAV

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

The idea behind Jyske Invest Nye and Sparinvest SICAV Procedo 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.