Correlation Between Jyske Bank and Swedbank

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

Diversification Opportunities for Jyske Bank and Swedbank

0.12

Correlation Coefficient

Jyske Bank  Swedbank

Average diversification

The 3 months correlation between Jyske and Swedbank is 0.12. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and Swedbank AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Swedbank AB 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 Swedbank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Swedbank AB has no effect on the direction of Jyske Bank i.e., Jyske Bank and Swedbank go up and down completely randomly.

Pair Corralation between Jyske Bank and Swedbank

Assuming the 90 days horizon Jyske Bank is expected to generate 5.45 times less return on investment than Swedbank. But when comparing it to its historical volatility, Jyske Bank AS is 3.52 times less risky than Swedbank. It trades about 0.13 of its potential returns per unit of risk. Swedbank AB is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest  1,810  in Swedbank AB on December 30, 2024 and sell it today you would earn a total of  529.00  from holding Swedbank AB or generate 29.23% 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.  Swedbank AB

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 10 (%) of all global equities and portfolios over the last 90 days. In spite of fairly strong forward-looking signals, Jyske Bank is not utilizing all of its potentials. The recent stock price disturbance, may contribute to short-term losses for the investors.

Swedbank AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Swedbank AB are ranked lower than 15 (%) of all global equities and portfolios over the last 90 days. In spite of fairly weak fundamental drivers, Swedbank showed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jyske Bank and Swedbank

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

The idea behind Jyske Bank AS and Swedbank AB 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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.