Correlation Between Jyske Invest and Nordfyns Bank

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

Diversification Opportunities for Jyske Invest and Nordfyns Bank

0.32

Correlation Coefficient

Jyske Invest  Nordfyns Bank

Weak diversification

The 3 months correlation between Jyske and Nordfyns is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Invest Nye and Nordfyns Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordfyns Bank AS 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 Nordfyns Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordfyns Bank AS has no effect on the direction of Jyske Invest i.e., Jyske Invest and Nordfyns Bank go up and down completely randomly.

Pair Corralation between Jyske Invest and Nordfyns Bank

Assuming the 90 days trading horizon Jyske Invest Nye is expected to generate 0.9 times more return on investment than Nordfyns Bank. However, Jyske Invest Nye is 1.11 times less risky than Nordfyns Bank. It trades about -0.02 of its potential returns per unit of risk. Nordfyns Bank AS is currently generating about -0.02 per unit of risk. If you would invest  28,380  in Jyske Invest Nye on October 26, 2024 and sell it today you would lose (420.00) from holding Jyske Invest Nye or give up 1.48% of portfolio value over 90 days.

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

Jyske Invest Nye  vs.  Nordfyns Bank AS

Jyske Invest Nye

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jyske Invest Nye has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent basic indicators, Jyske Invest is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

Nordfyns Bank AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Nordfyns Bank AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Nordfyns 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 Nordfyns Bank

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

The idea behind Jyske Invest Nye and Nordfyns Bank AS 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 Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.