Correlation Between Jyske Bank and Spar Nord

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

Diversification Opportunities for Jyske Bank and Spar Nord

0.58

Correlation Coefficient

Jyske Bank  Spar Nord

Very weak diversification

The 3 months correlation between Jyske and Spar is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and Spar Nord Bank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Spar Nord Bank 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 Spar Nord. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Spar Nord Bank has no effect on the direction of Jyske Bank i.e., Jyske Bank and Spar Nord go up and down completely randomly.

Pair Corralation between Jyske Bank and Spar Nord

Assuming the 90 days trading horizon Jyske Bank AS is expected to generate 3.85 times more return on investment than Spar Nord. However, Jyske Bank is 3.85 times more volatile than Spar Nord Bank. It trades about 0.2 of its potential returns per unit of risk. Spar Nord Bank is currently generating about 0.04 per unit of risk. If you would invest  48,836  in Jyske Bank AS on December 27, 2024 and sell it today you would earn a total of  8,314  from holding Jyske Bank AS or generate 17.02% return on investment over 90 days.

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

Jyske Bank AS  vs.  Spar Nord Bank

Jyske Bank AS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Bank AS are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Jyske Bank displayed solid returns over the last few months and may actually be approaching a breakup point.

Spar Nord Bank

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Spar Nord Bank are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy basic indicators, Spar Nord 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 Spar Nord

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

The idea behind Jyske Bank AS and Spar Nord Bank 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .