Correlation Between Jyske Bank and AP Mller

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

Diversification Opportunities for Jyske Bank and AP Mller

-0.03

Correlation Coefficient

Jyske Bank  AP Mller

Good diversification

The 3 months correlation between Jyske and MAERSK-B is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and AP Mller in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AP Mller 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 AP Mller. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AP Mller has no effect on the direction of Jyske Bank i.e., Jyske Bank and AP Mller go up and down completely randomly.

Pair Corralation between Jyske Bank and AP Mller

Assuming the 90 days trading horizon Jyske Bank AS is expected to generate 0.53 times more return on investment than AP Mller. However, Jyske Bank AS is 1.89 times less risky than AP Mller. It trades about 0.22 of its potential returns per unit of risk. AP Mller is currently generating about 0.06 per unit of risk. If you would invest  49,680  in Jyske Bank AS on November 29, 2024 and sell it today you would earn a total of  8,670  from holding Jyske Bank AS or generate 17.45% return on investment over 90 days.

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

Jyske Bank AS  vs.  AP Mller

Jyske Bank AS

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Bank AS are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of very weak basic indicators, Jyske Bank displayed solid returns over the last few months and may actually be approaching a breakup point.

AP Mller

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in AP Mller are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, AP Mller may actually be approaching a critical reversion point that can send shares even higher in March 2025.

Pair Trading with Jyske Bank and AP Mller

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

The idea behind Jyske Bank AS and AP Mller 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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.