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

-0.06

Correlation Coefficient

Jyske Bank  MetLife

Good diversification

The 3 months correlation between Jyske and MetLife is -0.06. 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 AS is expected to generate 1.43 times more return on investment than MetLife. However, Jyske Bank is 1.43 times more volatile than MetLife. It trades about 0.0 of its potential returns per unit of risk. MetLife is currently generating about 0.0 per unit of risk. If you would invest  55,121  in Jyske Bank AS on March 7, 2024 and sell it today you would lose (271.00) from holding Jyske Bank AS or give up 0.49% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Insignificant
Accuracy	92.06%
Values	Daily Returns

Jyske Bank AS  vs.  MetLife

Jyske Bank AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jyske Bank AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Jyske Bank is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

MetLife

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days MetLife has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable technical and fundamental indicators, MetLife is not utilizing all of its potentials. The latest stock price uproar, may contribute to short-horizon losses for the private investors.

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.

The idea behind Jyske Bank AS and MetLife 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.