Correlation Between Jyske Bank and Scandinavian Brake
Can any of the company-specific risk be diversified away by investing in both Jyske Bank and Scandinavian Brake 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 Scandinavian Brake 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 Scandinavian Brake Systems, you can compare the effects of market volatilities on Jyske Bank and Scandinavian Brake 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 Scandinavian Brake. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Bank and Scandinavian Brake.
Diversification Opportunities for Jyske Bank and Scandinavian Brake
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Jyske and Scandinavian is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and Scandinavian Brake Systems in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Brake 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 Scandinavian Brake. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Brake has no effect on the direction of Jyske Bank i.e., Jyske Bank and Scandinavian Brake go up and down completely randomly.
Pair Corralation between Jyske Bank and Scandinavian Brake
Assuming the 90 days trading horizon Jyske Bank AS is expected to generate 0.78 times more return on investment than Scandinavian Brake. However, Jyske Bank AS is 1.29 times less risky than Scandinavian Brake. It trades about -0.01 of its potential returns per unit of risk. Scandinavian Brake Systems is currently generating about -0.01 per unit of risk. If you would invest 51,827 in Jyske Bank AS on August 29, 2024 and sell it today you would lose (3,327) from holding Jyske Bank AS or give up 6.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.52% |
| Values | Daily Returns |
Jyske Bank AS vs. Scandinavian Brake Systems
Performance |
| Timeline |
| Jyske Bank AS |
| Scandinavian Brake |
Jyske Bank and Scandinavian Brake Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jyske Bank and Scandinavian Brake
The main advantage of trading using opposite Jyske Bank and Scandinavian Brake positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jyske Bank position performs unexpectedly, Scandinavian Brake 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 Scandinavian Brake will offset losses from the drop in Scandinavian Brake's long position.| Jyske Bank vs. Fynske Bank AS | Jyske Bank vs. Ringkjoebing Landbobank AS | Jyske Bank vs. BankIn Bredygt Klimaakt | Jyske Bank vs. Danske Andelskassers Bank |
| Scandinavian Brake vs. SKAKO AS | Scandinavian Brake vs. Newcap Holding AS | Scandinavian Brake vs. Columbus AS | Scandinavian Brake vs. Rovsing 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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