Correlation Between Penneo AS and Jyske Invest

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

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

Diversification Opportunities for Penneo AS and Jyske Invest

0.77

Correlation Coefficient

Penneo AS  Jyske Invest

Poor diversification

The 3 months correlation between Penneo and Jyske is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Penneo AS and Jyske Invest Virksomhedsobliga in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jyske Invest Virksom and Penneo AS 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 Penneo 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 Virksom has no effect on the direction of Penneo AS i.e., Penneo AS and Jyske Invest go up and down completely randomly.

Pair Corralation between Penneo AS and Jyske Invest

Assuming the 90 days trading horizon Penneo AS is expected to generate 66.29 times more return on investment than Jyske Invest. However, Penneo AS is 66.29 times more volatile than Jyske Invest Virksomhedsobligationer. It trades about 0.21 of its potential returns per unit of risk. Jyske Invest Virksomhedsobligationer is currently generating about 0.05 per unit of risk. If you would invest  802.00  in Penneo AS on September 22, 2024 and sell it today you would earn a total of  773.00  from holding Penneo AS or generate 96.38% return on investment over 90 days.

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

Penneo AS  vs.  Jyske Invest Virksomhedsobliga

Penneo AS

Risk-Adjusted Performance

8 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Penneo AS are ranked lower than 8 (%) of all global equities and portfolios over the last 90 days. Despite somewhat weak basic indicators, Penneo AS sustained solid returns over the last few months and may actually be approaching a breakup point.

Jyske Invest Virksom

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Invest Virksomhedsobligationer are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite quite persistent basic indicators, Jyske Invest is not utilizing all of its potentials. The current stock price mess, may contribute to short-term losses for the institutional investors.

Pair Trading with Penneo AS and Jyske Invest

The main advantage of trading using opposite Penneo AS and Jyske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Penneo AS 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 Penneo AS and Jyske Invest Virksomhedsobligationer 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.

Check out your portfolio center.

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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.