Correlation Between Western Alliance and Jyske Bank
Can any of the company-specific risk be diversified away by investing in both Western Alliance 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 Western Alliance and Jyske Bank into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Western Alliance Bancorporation and Jyske Bank AS, you can compare the effects of market volatilities on Western Alliance 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 Western Alliance with a short position of Jyske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Western Alliance and Jyske Bank.
Diversification Opportunities for Western Alliance and Jyske Bank
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Western and Jyske is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Western Alliance Bancorp. 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 Western Alliance 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 Western Alliance Bancorporation 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 Western Alliance i.e., Western Alliance and Jyske Bank go up and down completely randomly.
Pair Corralation between Western Alliance and Jyske Bank
Considering the 90-day investment horizon Western Alliance Bancorporation is expected to generate 2.55 times more return on investment than Jyske Bank. However, Western Alliance is 2.55 times more volatile than Jyske Bank AS. It trades about 0.05 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 5,836 in Western Alliance Bancorporation on September 3, 2024 and sell it today you would earn a total of 3,525 from holding Western Alliance Bancorporation or generate 60.4% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Western Alliance Bancorp. vs. Jyske Bank AS
Performance |
| Timeline |
| Western Alliance Ban |
| Jyske Bank AS |
Western Alliance and Jyske Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Western Alliance and Jyske Bank
The main advantage of trading using opposite Western Alliance and Jyske Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Western Alliance 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.| Western Alliance vs. JPMorgan Chase Co | Western Alliance vs. Citigroup | Western Alliance vs. Wells Fargo | Western Alliance vs. Toronto Dominion 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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