Correlation Between Jyske Bank and DFDS AS

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

Diversification Opportunities for Jyske Bank and DFDS AS

0.83

Correlation Coefficient

Jyske Bank  DFDS AS

Very poor diversification

The 3 months correlation between Jyske and DFDS is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and DFDS AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DFDS AS 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 DFDS AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DFDS AS has no effect on the direction of Jyske Bank i.e., Jyske Bank and DFDS AS go up and down completely randomly.

Pair Corralation between Jyske Bank and DFDS AS

Assuming the 90 days trading horizon Jyske Bank AS is expected to generate 0.85 times more return on investment than DFDS AS. However, Jyske Bank AS is 1.17 times less risky than DFDS AS. It trades about -0.06 of its potential returns per unit of risk. DFDS AS is currently generating about -0.18 per unit of risk. If you would invest  53,550  in Jyske Bank AS on September 3, 2024 and sell it today you would lose (3,870) from holding Jyske Bank AS or give up 7.23% of portfolio value over 90 days.

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

Jyske Bank AS  vs.  DFDS AS

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 latest weak performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

DFDS AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days DFDS AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain very healthy which may send shares a bit higher in January 2025. The recent disarray may also be a sign of long period up-swing for the firm investors.

Pair Trading with Jyske Bank and DFDS AS

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

The idea behind Jyske Bank AS and DFDS 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.