Correlation Between Partners Bank and Jyske Bank

Can any of the company-specific risk be diversified away by investing in both Partners Bank and Jyske Bank 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 Partners Bank and Jyske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Partners Bank of and Jyske Bank AS, you can compare the effects of market volatilities on Partners Bank and Jyske Bank 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 Partners Bank with a short position of Jyske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Partners Bank and Jyske Bank.

Diversification Opportunities for Partners Bank and Jyske Bank

-0.17

Correlation Coefficient

Partners Bank  Jyske Bank

Good diversification

The 3 months correlation between Partners and Jyske is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Partners Bank of and Jyske Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jyske Bank AS and Partners 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 Partners Bank of are associated (or correlated) with Jyske Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jyske Bank AS has no effect on the direction of Partners Bank i.e., Partners Bank and Jyske Bank go up and down completely randomly.

Pair Corralation between Partners Bank and Jyske Bank

Given the investment horizon of 90 days Partners Bank is expected to generate 8.81 times less return on investment than Jyske Bank. In addition to that, Partners Bank is 4.6 times more volatile than Jyske Bank AS. It trades about 0.0 of its total potential returns per unit of risk. Jyske Bank AS is currently generating about 0.13 per unit of volatility. If you would invest  1,361  in Jyske Bank AS on December 29, 2024 and sell it today you would earn a total of  68.00  from holding Jyske Bank AS or generate 5.0% return on investment over 90 days.

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

Partners Bank of  vs.  Jyske Bank AS

Partners Bank

Risk-Adjusted Performance

Very Weak

Over the last 90 days Partners Bank of has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly strong forward-looking signals, Partners Bank is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

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.

Pair Trading with Partners Bank and Jyske Bank

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

The idea behind Partners Bank of and Jyske Bank 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.

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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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.