Correlation Between Jyske Invest and Ringkjoebing Landbobank

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

Diversification Opportunities for Jyske Invest and Ringkjoebing Landbobank

-0.28

Correlation Coefficient

Jyske Invest  Ringkjoebing Landbobank

Very good diversification

The 3 months correlation between Jyske and Ringkjoebing is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Invest Nye and Ringkjoebing Landbobank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ringkjoebing Landbobank 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 Ringkjoebing Landbobank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ringkjoebing Landbobank has no effect on the direction of Jyske Invest i.e., Jyske Invest and Ringkjoebing Landbobank go up and down completely randomly.

Pair Corralation between Jyske Invest and Ringkjoebing Landbobank

Assuming the 90 days trading horizon Jyske Invest Nye is expected to under-perform the Ringkjoebing Landbobank. But the stock apears to be less risky and, when comparing its historical volatility, Jyske Invest Nye is 2.27 times less risky than Ringkjoebing Landbobank. The stock trades about -0.11 of its potential returns per unit of risk. The Ringkjoebing Landbobank AS is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest  117,300  in Ringkjoebing Landbobank AS on October 11, 2024 and sell it today you would earn a total of  1,100  from holding Ringkjoebing Landbobank AS or generate 0.94% return on investment over 90 days.

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

Jyske Invest Nye  vs.  Ringkjoebing Landbobank 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 latest stock price mess, may contribute to short-term losses for the institutional investors.

Ringkjoebing Landbobank

Risk-Adjusted Performance

10 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Ringkjoebing Landbobank AS are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. In spite of rather unfluctuating fundamental indicators, Ringkjoebing Landbobank may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Pair Trading with Jyske Invest and Ringkjoebing Landbobank

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

The idea behind Jyske Invest Nye and Ringkjoebing Landbobank 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.