Correlation Between Prime Office and Jyske Invest
Can any of the company-specific risk be diversified away by investing in both Prime Office and Jyske Invest 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 Prime Office and Jyske Invest into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Prime Office AS and Jyske Invest Nye, you can compare the effects of market volatilities on Prime Office and Jyske Invest 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 Prime Office with a short position of Jyske Invest. Check out your portfolio center. Please also check ongoing floating volatility patterns of Prime Office and Jyske Invest.
Diversification Opportunities for Prime Office and Jyske Invest
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between Prime and Jyske is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding Prime Office AS and Jyske Invest Nye in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Jyske Invest Nye and Prime Office 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 Prime Office AS are associated (or correlated) with Jyske Invest. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Jyske Invest Nye has no effect on the direction of Prime Office i.e., Prime Office and Jyske Invest go up and down completely randomly.
Pair Corralation between Prime Office and Jyske Invest
Assuming the 90 days trading horizon Prime Office AS is expected to under-perform the Jyske Invest. In addition to that, Prime Office is 4.84 times more volatile than Jyske Invest Nye. It trades about 0.0 of its total potential returns per unit of risk. Jyske Invest Nye is currently generating about 0.06 per unit of volatility. If you would invest 8,756 in Jyske Invest Nye on September 13, 2024 and sell it today you would earn a total of 1,319 from holding Jyske Invest Nye or generate 15.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 98.18% |
| Values | Daily Returns |
Prime Office AS vs. Jyske Invest Nye
Performance |
| Timeline |
| Prime Office AS |
| Jyske Invest Nye |
Prime Office and Jyske Invest Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Prime Office and Jyske Invest
The main advantage of trading using opposite Prime Office and Jyske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Prime Office position performs unexpectedly, Jyske Invest 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 Invest will offset losses from the drop in Jyske Invest's long position.| Prime Office vs. Djurslands Bank | Prime Office vs. North Media AS | Prime Office vs. First Farms AS | Prime Office vs. Gabriel Holding |
| Jyske Invest vs. Jyske Bank AS | Jyske Invest vs. Skjern Bank AS | Jyske Invest vs. Groenlandsbanken AS | Jyske Invest vs. Prime Office 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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