Correlation Between Tryg AS and Jyske Invest

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

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

Diversification Opportunities for Tryg AS and Jyske Invest

0.38

Correlation Coefficient

Tryg AS  Jyske Invest

Weak diversification

The 3 months correlation between Tryg and Jyske is 0.38. Overlapping area represents the amount of risk that can be diversified away by holding Tryg 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 Tryg AS 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 Tryg 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 Tryg AS i.e., Tryg AS and Jyske Invest go up and down completely randomly.

Pair Corralation between Tryg AS and Jyske Invest

Assuming the 90 days trading horizon Tryg AS is expected to under-perform the Jyske Invest. But the stock apears to be less risky and, when comparing its historical volatility, Tryg AS is 1.18 times less risky than Jyske Invest. The stock trades about -0.02 of its potential returns per unit of risk. The Jyske Invest Nye is currently generating about 0.14 of returns per unit of risk over similar time horizon. If you would invest  26,170  in Jyske Invest Nye on September 13, 2024 and sell it today you would earn a total of  2,510  from holding Jyske Invest Nye or generate 9.59% return on investment over 90 days.

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

Tryg AS  vs.  Jyske Invest Nye

Tryg AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Tryg AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Tryg AS is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Jyske Invest Nye

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Invest Nye are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. Despite quite unfluctuating basic indicators, Jyske Invest may actually be approaching a critical reversion point that can send shares even higher in January 2025.

Pair Trading with Tryg AS and Jyske Invest

The main advantage of trading using opposite Tryg AS and Jyske Invest positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tryg AS 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.

The idea behind Tryg AS and Jyske Invest Nye 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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.