Correlation Between Jyske Bank and Jyske Invest

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

Diversification Opportunities for Jyske Bank and Jyske Invest

0.1

Correlation Coefficient

Jyske Bank  Jyske Invest

Average diversification

The 3 months correlation between Jyske and Jyske is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and Jyske Invest Nye in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jyske Invest Nye 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 Jyske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jyske Invest Nye has no effect on the direction of Jyske Bank i.e., Jyske Bank and Jyske Invest go up and down completely randomly.

Pair Corralation between Jyske Bank and Jyske Invest

Assuming the 90 days trading horizon Jyske Bank AS is expected to under-perform the Jyske Invest. In addition to that, Jyske Bank is 4.06 times more volatile than Jyske Invest Nye. It trades about -0.03 of its total potential returns per unit of risk. Jyske Invest Nye is currently generating about 0.08 per unit of volatility. If you would invest  9,882  in Jyske Invest Nye on September 12, 2024 and sell it today you would earn a total of  193.00  from holding Jyske Invest Nye or generate 1.95% return on investment over 90 days.

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

Jyske Bank AS  vs.  Jyske Invest Nye

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 recent stock price disarray, may contribute to short-term losses for the investors.

Jyske Invest Nye

Risk-Adjusted Performance

6 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Invest Nye are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong forward indicators, Jyske Invest is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Jyske Bank and Jyske Invest

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

The idea behind Jyske Bank AS and Jyske Invest Nye 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.