Correlation Between Jyske Bank and Hydract AS
Can any of the company-specific risk be diversified away by investing in both Jyske Bank and Hydract AS 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 Hydract AS 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 Hydract AS, you can compare the effects of market volatilities on Jyske Bank and Hydract AS 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 Hydract AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Bank and Hydract AS.
Diversification Opportunities for Jyske Bank and Hydract AS
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jyske and Hydract is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and Hydract AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hydract AS 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 Hydract AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hydract AS has no effect on the direction of Jyske Bank i.e., Jyske Bank and Hydract AS go up and down completely randomly.
Pair Corralation between Jyske Bank and Hydract AS
Assuming the 90 days trading horizon Jyske Bank is expected to generate 54.46 times less return on investment than Hydract AS. But when comparing it to its historical volatility, Jyske Bank AS is 14.34 times less risky than Hydract AS. It trades about 0.08 of its potential returns per unit of risk. Hydract AS is currently generating about 0.29 of returns per unit of risk over similar time horizon. If you would invest 21.00 in Hydract AS on September 4, 2024 and sell it today you would earn a total of 24.00 from holding Hydract AS or generate 114.29% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jyske Bank AS vs. Hydract AS
Performance |
| Timeline |
| Jyske Bank AS |
| Hydract AS |
Jyske Bank and Hydract AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jyske Bank and Hydract AS
The main advantage of trading using opposite Jyske Bank and Hydract AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jyske Bank position performs unexpectedly, Hydract AS 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 Hydract AS will offset losses from the drop in Hydract AS's long position.| Jyske Bank vs. FLSmidth Co | Jyske Bank vs. Danske Bank AS | Jyske Bank vs. ISS AS | Jyske Bank vs. DSV Panalpina AS |
| Hydract AS vs. Groenlandsbanken AS | Hydract AS vs. Vestjysk Bank AS | Hydract AS vs. Embla Medical hf | Hydract AS vs. Lollands Bank |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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