Correlation Between Jyske Bank and Dantax

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

By analyzing existing cross correlation between Jyske Bank AS and Dantax, you can compare the effects of market volatilities on Jyske Bank and Dantax 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 Bank with a short position of Dantax. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Bank and Dantax.

Diversification Opportunities for Jyske Bank and Dantax

0.65

Correlation Coefficient

Jyske Bank  Dantax

Poor diversification

The 3 months correlation between Jyske and Dantax is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and Dantax in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Dantax and Jyske Bank 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 Bank AS are associated (or correlated) with Dantax. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Dantax has no effect on the direction of Jyske Bank i.e., Jyske Bank and Dantax go up and down completely randomly.

Pair Corralation between Jyske Bank and Dantax

Assuming the 90 days trading horizon Jyske Bank is expected to generate 4.66 times less return on investment than Dantax. But when comparing it to its historical volatility, Jyske Bank AS is 2.34 times less risky than Dantax. It trades about 0.07 of its potential returns per unit of risk. Dantax is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  39,600  in Dantax on September 25, 2024 and sell it today you would earn a total of  3,200  from holding Dantax or generate 8.08% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	95.45%
Values	Daily Returns

Jyske Bank AS  vs.  Dantax

Jyske Bank AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jyske Bank AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Jyske Bank is not utilizing all of its potentials. The current stock price disarray, may contribute to short-term losses for the investors.

Dantax

Risk-Adjusted Performance

0 of 100

Very Weak

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

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

The idea behind Jyske Bank AS and Dantax 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.

Check out your portfolio center.

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 Anywhere module to track or share privately all of your investments from the convenience of any device.