Correlation Between AIB Group and Jyske Bank
Can any of the company-specific risk be diversified away by investing in both AIB Group 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 AIB Group and Jyske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between AIB Group PLC and Jyske Bank AS, you can compare the effects of market volatilities on AIB Group 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 AIB Group with a short position of Jyske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of AIB Group and Jyske Bank.
Diversification Opportunities for AIB Group and Jyske Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between AIB and Jyske is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding AIB Group PLC 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 AIB Group 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 AIB Group PLC 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 AIB Group i.e., AIB Group and Jyske Bank go up and down completely randomly.
Pair Corralation between AIB Group and Jyske Bank
Assuming the 90 days horizon AIB Group is expected to generate 1.75 times less return on investment than Jyske Bank. In addition to that, AIB Group is 1.6 times more volatile than Jyske Bank AS. It trades about 0.02 of its total potential returns per unit of risk. Jyske Bank AS is currently generating about 0.06 per unit of volatility. If you would invest 968.00 in Jyske Bank AS on November 2, 2024 and sell it today you would earn a total of 461.00 from holding Jyske Bank AS or generate 47.62% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 22.72% |
| Values | Daily Returns |
AIB Group PLC vs. Jyske Bank AS
Performance |
| Timeline |
| AIB Group PLC |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Jyske Bank AS |
AIB Group and Jyske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AIB Group and Jyske Bank
The main advantage of trading using opposite AIB Group and Jyske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AIB Group 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 AIB Group PLC 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.| Jyske Bank vs. Baraboo Bancorporation | Jyske Bank vs. Schweizerische Nationalbank | Jyske Bank vs. Danske Bank AS | Jyske Bank vs. Absa Group Limited |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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