Correlation Between Tryg AS and Jyske Bank

Can any of the company-specific risk be diversified away by investing in both Tryg AS 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 Tryg AS and Jyske Bank 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 Bank AS, you can compare the effects of market volatilities on Tryg AS 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 Tryg AS with a short position of Jyske Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tryg AS and Jyske Bank.

Diversification Opportunities for Tryg AS and Jyske Bank

-0.49

Correlation Coefficient

Tryg AS  Jyske Bank

Very good diversification

The 3 months correlation between Tryg and Jyske is -0.49. Overlapping area represents the amount of risk that can be diversified away by holding Tryg AS 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 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 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 Tryg AS i.e., Tryg AS and Jyske Bank go up and down completely randomly.

Pair Corralation between Tryg AS and Jyske Bank

Assuming the 90 days trading horizon Tryg AS is expected to generate 0.52 times more return on investment than Jyske Bank. However, Tryg AS is 1.91 times less risky than Jyske Bank. It trades about 0.17 of its potential returns per unit of risk. Jyske Bank AS is currently generating about -0.09 per unit of risk. If you would invest  14,860  in Tryg AS on August 30, 2024 and sell it today you would earn a total of  1,390  from holding Tryg AS or generate 9.35% return on investment over 90 days.

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

Tryg AS  vs.  Jyske Bank AS

Tryg AS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Tryg AS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Tryg AS may actually be approaching a critical reversion point that can send shares even higher in December 2024.

Jyske Bank AS

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Jyske Bank AS has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest unfluctuating performance, the Stock's basic indicators remain healthy and the recent disarray on Wall Street may also be a sign of long period gains for the firm investors.

Pair Trading with Tryg AS and Jyske Bank

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

The idea behind Tryg AS and Jyske Bank AS 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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.