Correlation Between FOM Technologies and Jyske Bank
Can any of the company-specific risk be diversified away by investing in both FOM Technologies 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 FOM Technologies and Jyske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FOM Technologies AS and Jyske Bank AS, you can compare the effects of market volatilities on FOM Technologies 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 FOM Technologies with a short position of Jyske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of FOM Technologies and Jyske Bank.
Diversification Opportunities for FOM Technologies and Jyske Bank
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between FOM and Jyske is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding FOM Technologies AS 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 FOM Technologies 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 FOM Technologies AS 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 FOM Technologies i.e., FOM Technologies and Jyske Bank go up and down completely randomly.
Pair Corralation between FOM Technologies and Jyske Bank
Assuming the 90 days trading horizon FOM Technologies AS is expected to under-perform the Jyske Bank. In addition to that, FOM Technologies is 2.97 times more volatile than Jyske Bank AS. It trades about -0.2 of its total potential returns per unit of risk. Jyske Bank AS is currently generating about 0.16 per unit of volatility. If you would invest 50,050 in Jyske Bank AS on October 9, 2024 and sell it today you would earn a total of 1,700 from holding Jyske Bank AS or generate 3.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
FOM Technologies AS vs. Jyske Bank AS
Performance |
| Timeline |
| FOM Technologies |
| Jyske Bank AS |
FOM Technologies and Jyske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FOM Technologies and Jyske Bank
The main advantage of trading using opposite FOM Technologies and Jyske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FOM Technologies 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.| FOM Technologies vs. cBrain AS | FOM Technologies vs. Penneo AS | FOM Technologies vs. Shape Robotics AS | FOM Technologies vs. ALK Abell AS |
| Jyske Bank vs. Sydbank AS | Jyske Bank vs. Scandinavian Investment Group | Jyske Bank vs. Nordfyns Bank AS | Jyske Bank vs. Dataproces Group AS |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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