Correlation Between Jyske Invest and Hvidbjerg Bank

Can any of the company-specific risk be diversified away by investing in both Jyske Invest and Hvidbjerg 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 Hvidbjerg Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jyske Invest Virksomhedsobligationer and Hvidbjerg Bank, you can compare the effects of market volatilities on Jyske Invest and Hvidbjerg 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 Hvidbjerg Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Invest and Hvidbjerg Bank.

Diversification Opportunities for Jyske Invest and Hvidbjerg Bank

0.62

Correlation Coefficient

Jyske Invest  Hvidbjerg Bank

Poor diversification

The 3 months correlation between Jyske and Hvidbjerg is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Invest Virksomhedsobliga and Hvidbjerg Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hvidbjerg Bank 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 Virksomhedsobligationer are associated (or correlated) with Hvidbjerg Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hvidbjerg Bank has no effect on the direction of Jyske Invest i.e., Jyske Invest and Hvidbjerg Bank go up and down completely randomly.

Pair Corralation between Jyske Invest and Hvidbjerg Bank

Assuming the 90 days trading horizon Jyske Invest is expected to generate 27.58 times less return on investment than Hvidbjerg Bank. But when comparing it to its historical volatility, Jyske Invest Virksomhedsobligationer is 4.46 times less risky than Hvidbjerg Bank. It trades about 0.03 of its potential returns per unit of risk. Hvidbjerg Bank is currently generating about 0.21 of returns per unit of risk over similar time horizon. If you would invest  11,300  in Hvidbjerg Bank on October 4, 2024 and sell it today you would earn a total of  1,900  from holding Hvidbjerg Bank or generate 16.81% return on investment over 90 days.

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

Jyske Invest Virksomhedsobliga  vs.  Hvidbjerg Bank

Jyske Invest Virksom

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Invest Virksomhedsobligationer are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. 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.

Hvidbjerg Bank

Risk-Adjusted Performance

16 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Hvidbjerg Bank are ranked lower than 16 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Hvidbjerg Bank displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jyske Invest and Hvidbjerg Bank

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

The idea behind Jyske Invest Virksomhedsobligationer and Hvidbjerg Bank 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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.