Correlation Between Jyske Bank and Royal Bank
Can any of the company-specific risk be diversified away by investing in both Jyske Bank and Royal 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 Jyske Bank and Royal Bank 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 Royal Bank of, you can compare the effects of market volatilities on Jyske Bank and Royal 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 Jyske Bank with a short position of Royal Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Bank and Royal Bank.
Diversification Opportunities for Jyske Bank and Royal Bank
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Jyske and Royal is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and Royal Bank of in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Royal Bank 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 Royal Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Royal Bank has no effect on the direction of Jyske Bank i.e., Jyske Bank and Royal Bank go up and down completely randomly.
Pair Corralation between Jyske Bank and Royal Bank
Assuming the 90 days trading horizon Jyske Bank AS is expected to generate 1.82 times more return on investment than Royal Bank. However, Jyske Bank is 1.82 times more volatile than Royal Bank of. It trades about 0.07 of its potential returns per unit of risk. Royal Bank of is currently generating about -0.1 per unit of risk. If you would invest 53,500 in Jyske Bank AS on November 28, 2024 and sell it today you would earn a total of 1,350 from holding Jyske Bank AS or generate 2.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jyske Bank AS vs. Royal Bank of
Performance |
| Timeline |
| Jyske Bank AS |
| Royal Bank |
Jyske Bank and Royal Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jyske Bank and Royal Bank
The main advantage of trading using opposite Jyske Bank and Royal Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jyske Bank position performs unexpectedly, Royal 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 Royal Bank will offset losses from the drop in Royal Bank's long position.| Jyske Bank vs. Deutsche Pfandbriefbank AG | Jyske Bank vs. Berner Kantonalbank AG | Jyske Bank vs. International Biotechnology Trust | Jyske Bank vs. Synthomer plc |
| Royal Bank vs. Infineon Technologies AG | Royal Bank vs. Pfeiffer Vacuum Technology | Royal Bank vs. Ecofin Global Utilities | Royal Bank vs. Applied Materials |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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