Correlation Between Jyske Bank and Nordfyns Bank
Can any of the company-specific risk be diversified away by investing in both Jyske Bank and Nordfyns 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 Nordfyns 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 Nordfyns Bank AS, you can compare the effects of market volatilities on Jyske Bank and Nordfyns 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 Nordfyns Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Bank and Nordfyns Bank.
Diversification Opportunities for Jyske Bank and Nordfyns Bank
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jyske and Nordfyns is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and Nordfyns Bank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Nordfyns Bank 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 Nordfyns Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Nordfyns Bank AS has no effect on the direction of Jyske Bank i.e., Jyske Bank and Nordfyns Bank go up and down completely randomly.
Pair Corralation between Jyske Bank and Nordfyns Bank
Assuming the 90 days trading horizon Jyske Bank is expected to generate 2.01 times less return on investment than Nordfyns Bank. In addition to that, Jyske Bank is 1.23 times more volatile than Nordfyns Bank AS. It trades about 0.03 of its total potential returns per unit of risk. Nordfyns Bank AS is currently generating about 0.08 per unit of volatility. If you would invest 24,200 in Nordfyns Bank AS on November 27, 2024 and sell it today you would earn a total of 11,600 from holding Nordfyns Bank AS or generate 47.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Jyske Bank AS vs. Nordfyns Bank AS
Performance |
| Timeline |
| Jyske Bank AS |
| Nordfyns Bank AS |
Jyske Bank and Nordfyns Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jyske Bank and Nordfyns Bank
The main advantage of trading using opposite Jyske Bank and Nordfyns Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jyske Bank position performs unexpectedly, Nordfyns 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 Nordfyns Bank will offset losses from the drop in Nordfyns Bank's long position.| Jyske Bank vs. TROPHY GAMES Development | Jyske Bank vs. Danske Andelskassers Bank | Jyske Bank vs. NTG Nordic Transport | Jyske Bank vs. Strategic Investments AS |
| Nordfyns Bank vs. Skjern Bank AS | Nordfyns Bank vs. Lollands Bank | Nordfyns Bank vs. Djurslands Bank | Nordfyns Bank vs. Moens Bank 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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