Correlation Between Jyske Bank and DSV Panalpina

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

Diversification Opportunities for Jyske Bank and DSV Panalpina

-0.51

Correlation Coefficient

Jyske Bank  DSV Panalpina

Excellent diversification

The 3 months correlation between Jyske and DSV is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and DSV Panalpina AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DSV Panalpina 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 DSV Panalpina. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DSV Panalpina AS has no effect on the direction of Jyske Bank i.e., Jyske Bank and DSV Panalpina go up and down completely randomly.

Pair Corralation between Jyske Bank and DSV Panalpina

Assuming the 90 days trading horizon Jyske Bank AS is expected to generate 1.13 times more return on investment than DSV Panalpina. However, Jyske Bank is 1.13 times more volatile than DSV Panalpina AS. It trades about 0.13 of its potential returns per unit of risk. DSV Panalpina AS is currently generating about -0.07 per unit of risk. If you would invest  49,760  in Jyske Bank AS on November 20, 2024 and sell it today you would earn a total of  4,390  from holding Jyske Bank AS or generate 8.82% return on investment over 90 days.

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

Jyske Bank AS  vs.  DSV Panalpina AS

Jyske Bank AS

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Bank AS are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Jyske Bank may actually be approaching a critical reversion point that can send shares even higher in March 2025.

DSV Panalpina AS

Risk-Adjusted Performance

Very Weak

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

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

The idea behind Jyske Bank AS and DSV Panalpina 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.

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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .