Correlation Between Jyske Invest and Maj Invest

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

Diversification Opportunities for Jyske Invest and Maj Invest

0.63

Correlation Coefficient

Jyske Invest  Maj Invest

Poor diversification

The 3 months correlation between Jyske and Maj is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Invest Nye and Maj Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Maj Invest 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 Maj Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Maj Invest has no effect on the direction of Jyske Invest i.e., Jyske Invest and Maj Invest go up and down completely randomly.

Pair Corralation between Jyske Invest and Maj Invest

Assuming the 90 days trading horizon Jyske Invest Nye is expected to under-perform the Maj Invest. But the stock apears to be less risky and, when comparing its historical volatility, Jyske Invest Nye is 1.03 times less risky than Maj Invest. The stock trades about -0.12 of its potential returns per unit of risk. The Maj Invest is currently generating about -0.07 of returns per unit of risk over similar time horizon. If you would invest  10,093  in Maj Invest on December 30, 2024 and sell it today you would lose (333.00) from holding Maj Invest or give up 3.3% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.31%
Values	Daily Returns

Jyske Invest Nye  vs.  Maj Invest

Jyske Invest Nye

Risk-Adjusted Performance

Very Weak

Over the last 90 days Jyske Invest Nye has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable basic indicators, Jyske Invest is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Maj Invest

Risk-Adjusted Performance

Very Weak

Over the last 90 days Maj Invest has generated negative risk-adjusted returns adding no value to fund investors. In spite of rather sound fundamental indicators, Maj Invest is not utilizing all of its potentials. The current stock price tumult, may contribute to shorter-term losses for the shareholders.

Pair Trading with Jyske Invest and Maj Invest

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

The idea behind Jyske Invest Nye and Maj Invest 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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.