Correlation Between Danske Bank and Jeudan
Can any of the company-specific risk be diversified away by investing in both Danske Bank and Jeudan 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 Danske Bank and Jeudan into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Danske Bank AS and Jeudan, you can compare the effects of market volatilities on Danske Bank and Jeudan 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 Danske Bank with a short position of Jeudan. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Bank and Jeudan.
Diversification Opportunities for Danske Bank and Jeudan
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Danske and Jeudan is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Danske Bank AS and Jeudan in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jeudan and Danske 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 Danske Bank AS are associated (or correlated) with Jeudan. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jeudan has no effect on the direction of Danske Bank i.e., Danske Bank and Jeudan go up and down completely randomly.
Pair Corralation between Danske Bank and Jeudan
Assuming the 90 days trading horizon Danske Bank AS is expected to under-perform the Jeudan. But the stock apears to be less risky and, when comparing its historical volatility, Danske Bank AS is 1.37 times less risky than Jeudan. The stock trades about -0.05 of its potential returns per unit of risk. The Jeudan is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 20,800 in Jeudan on August 28, 2024 and sell it today you would earn a total of 500.00 from holding Jeudan or generate 2.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Danske Bank AS vs. Jeudan
Performance |
| Timeline |
| Danske Bank AS |
| Jeudan |
Danske Bank and Jeudan Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Bank and Jeudan
The main advantage of trading using opposite Danske Bank and Jeudan positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske Bank position performs unexpectedly, Jeudan 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 Jeudan will offset losses from the drop in Jeudan's long position.| Danske Bank vs. Bavarian Nordic | Danske Bank vs. DSV Panalpina AS | Danske Bank vs. Vestas Wind Systems | Danske Bank vs. Ambu AS |
| Jeudan vs. BioPorto | Jeudan vs. Newcap Holding AS | Jeudan vs. Agat Ejendomme AS | Jeudan vs. PF Atlantic Petroleum |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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