Correlation Between Spar Nord and Jyske Bank
Can any of the company-specific risk be diversified away by investing in both Spar Nord 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 Spar Nord and Jyske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Spar Nord Bank and Jyske Bank AS, you can compare the effects of market volatilities on Spar Nord 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 Spar Nord with a short position of Jyske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Spar Nord and Jyske Bank.
Diversification Opportunities for Spar Nord and Jyske Bank
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Spar and Jyske is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Spar Nord Bank 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 Spar Nord 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 Spar Nord Bank 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 Spar Nord i.e., Spar Nord and Jyske Bank go up and down completely randomly.
Pair Corralation between Spar Nord and Jyske Bank
Assuming the 90 days trading horizon Spar Nord Bank is expected to generate 0.92 times more return on investment than Jyske Bank. However, Spar Nord Bank is 1.09 times less risky than Jyske Bank. It trades about 0.06 of its potential returns per unit of risk. Jyske Bank AS is currently generating about -0.04 per unit of risk. If you would invest 12,400 in Spar Nord Bank on August 25, 2024 and sell it today you would earn a total of 1,240 from holding Spar Nord Bank or generate 10.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Spar Nord Bank vs. Jyske Bank AS
Performance |
| Timeline |
| Spar Nord Bank |
| Jyske Bank AS |
Spar Nord and Jyske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Spar Nord and Jyske Bank
The main advantage of trading using opposite Spar Nord and Jyske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Spar Nord 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.| Spar Nord vs. Dataproces Group AS | Spar Nord vs. cBrain AS | Spar Nord vs. ALK Abell AS | Spar Nord vs. ChemoMetec AS |
| Jyske Bank vs. Groenlandsbanken AS | Jyske Bank vs. TROPHY GAMES Development | Jyske Bank vs. Sydbank AS | Jyske Bank vs. Carnegie Wealth Management |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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