Correlation Between Strategic Investments and Jyske Bank

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

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

Diversification Opportunities for Strategic Investments and Jyske Bank

-0.03

Correlation Coefficient

Strategic Investments  Jyske Bank

Good diversification

The 3 months correlation between Strategic and Jyske is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Strategic Investments AS 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 Strategic Investments 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 Strategic Investments AS 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 Strategic Investments i.e., Strategic Investments and Jyske Bank go up and down completely randomly.

Pair Corralation between Strategic Investments and Jyske Bank

Assuming the 90 days trading horizon Strategic Investments AS is expected to under-perform the Jyske Bank. In addition to that, Strategic Investments is 1.49 times more volatile than Jyske Bank AS. It trades about -0.01 of its total potential returns per unit of risk. Jyske Bank AS is currently generating about 0.05 per unit of volatility. If you would invest  45,147  in Jyske Bank AS on December 1, 2024 and sell it today you would earn a total of  12,853  from holding Jyske Bank AS or generate 28.47% return on investment over 90 days.

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

Strategic Investments AS  vs.  Jyske Bank AS

Strategic Investments

Risk-Adjusted Performance

Very Weak

Over the last 90 days Strategic Investments AS has generated negative risk-adjusted returns adding no value to investors with long positions. Despite somewhat strong basic indicators, Strategic Investments 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

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Bank AS are ranked lower than 16 (%) 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.

Pair Trading with Strategic Investments and Jyske Bank

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

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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.