Correlation Between Jyske Invest and Sparinvest INDEX

Can any of the company-specific risk be diversified away by investing in both Jyske Invest and Sparinvest INDEX 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 Invest and Sparinvest INDEX into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Jyske Invest Nye and Sparinvest INDEX Globale, you can compare the effects of market volatilities on Jyske Invest and Sparinvest INDEX 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 Invest with a short position of Sparinvest INDEX. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Invest and Sparinvest INDEX.

Diversification Opportunities for Jyske Invest and Sparinvest INDEX

0.41

Correlation Coefficient

Jyske Invest  Sparinvest INDEX

Very weak diversification

The 3 months correlation between Jyske and Sparinvest is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Invest Nye and Sparinvest INDEX Globale in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sparinvest INDEX Globale and Jyske Invest 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 Invest Nye are associated (or correlated) with Sparinvest INDEX. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sparinvest INDEX Globale has no effect on the direction of Jyske Invest i.e., Jyske Invest and Sparinvest INDEX go up and down completely randomly.

Pair Corralation between Jyske Invest and Sparinvest INDEX

Assuming the 90 days trading horizon Jyske Invest is expected to generate 3.57 times less return on investment than Sparinvest INDEX. But when comparing it to its historical volatility, Jyske Invest Nye is 1.78 times less risky than Sparinvest INDEX. It trades about 0.09 of its potential returns per unit of risk. Sparinvest INDEX Globale is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest  14,309  in Sparinvest INDEX Globale on September 9, 2024 and sell it today you would earn a total of  1,009  from holding Sparinvest INDEX Globale or generate 7.05% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Weak
Accuracy	100.0%
Values	Daily Returns

Jyske Invest Nye  vs.  Sparinvest INDEX Globale

Jyske Invest Nye

Risk-Adjusted Performance

7 of 100

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Invest Nye are ranked lower than 7 (%) of all global equities and portfolios over the last 90 days. In spite of fairly stable basic indicators, Jyske Invest is not utilizing all of its potentials. The current stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Sparinvest INDEX Globale

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sparinvest INDEX Globale are ranked lower than 14 (%) of all funds and portfolios of funds over the last 90 days. In spite of very conflicting basic indicators, Sparinvest INDEX may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Jyske Invest and Sparinvest INDEX

The main advantage of trading using opposite Jyske Invest and Sparinvest INDEX positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jyske Invest position performs unexpectedly, Sparinvest INDEX 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 Sparinvest INDEX will offset losses from the drop in Sparinvest INDEX's long position.

The idea behind Jyske Invest Nye and Sparinvest INDEX Globale pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.