Correlation Between Jyske Bank and MetLife
Can any of the company-specific risk be diversified away by investing in both Jyske Bank and MetLife 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 MetLife 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 MetLife, you can compare the effects of market volatilities on Jyske Bank and MetLife 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 MetLife. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Bank and MetLife.
Diversification Opportunities for Jyske Bank and MetLife
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jyske and MetLife is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and MetLife in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MetLife 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 MetLife. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MetLife has no effect on the direction of Jyske Bank i.e., Jyske Bank and MetLife go up and down completely randomly.
Pair Corralation between Jyske Bank and MetLife
Assuming the 90 days trading horizon Jyske Bank is expected to generate 1.1 times less return on investment than MetLife. In addition to that, Jyske Bank is 1.54 times more volatile than MetLife. It trades about 0.07 of its total potential returns per unit of risk. MetLife is currently generating about 0.11 per unit of volatility. If you would invest 6,802 in MetLife on February 12, 2024 and sell it today you would earn a total of 471.00 from holding MetLife or generate 6.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.31% |
| Values | Daily Returns |
Jyske Bank AS vs. MetLife
Performance |
| Timeline |
| Jyske Bank AS |
| MetLife |
Jyske Bank and MetLife Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jyske Bank and MetLife
The main advantage of trading using opposite Jyske Bank and MetLife positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jyske Bank position performs unexpectedly, MetLife 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 MetLife will offset losses from the drop in MetLife's long position.| Jyske Bank vs. Skjern Bank AS | Jyske Bank vs. Djurslands Bank | Jyske Bank vs. Groenlandsbanken AS | Jyske Bank vs. Lollands Bank |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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