Correlation Between DKINVO and Jyske Bank
Can any of the company-specific risk be diversified away by investing in both DKINVO 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 DKINVO and Jyske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Investeringsforeningen Danske Invest and Jyske Bank AS, you can compare the effects of market volatilities on DKINVO 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 DKINVO with a short position of Jyske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of DKINVO and Jyske Bank.
Diversification Opportunities for DKINVO and Jyske Bank
0.34 | Correlation Coefficient |
Weak diversification
The 3 months correlation between DKINVO and Jyske is 0.34. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Danske 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 DKINVO 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 Investeringsforeningen Danske Invest 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 DKINVO i.e., DKINVO and Jyske Bank go up and down completely randomly.
Pair Corralation between DKINVO and Jyske Bank
Assuming the 90 days trading horizon DKINVO is expected to generate 1.25 times less return on investment than Jyske Bank. But when comparing it to its historical volatility, Investeringsforeningen Danske Invest is 10.55 times less risky than Jyske Bank. It trades about 0.14 of its potential returns per unit of risk. Jyske Bank AS is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 53,898 in Jyske Bank AS on February 28, 2024 and sell it today you would earn a total of 402.00 from holding Jyske Bank AS or generate 0.75% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 98.31% |
Values | Daily Returns |
Investeringsforeningen Danske vs. Jyske Bank AS
Performance |
Timeline |
Investeringsforeningen |
Jyske Bank AS |
DKINVO and Jyske Bank Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with DKINVO and Jyske Bank
The main advantage of trading using opposite DKINVO and Jyske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DKINVO 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.DKINVO vs. Netcompany Group AS | DKINVO vs. cBrain AS | DKINVO vs. ALK Abell AS | DKINVO vs. Green Hydrogen Systems |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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