Correlation Between Jyske Bank and US Bancorp
Can any of the company-specific risk be diversified away by investing in both Jyske Bank and US Bancorp 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 Bank and US Bancorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Jyske Bank AS and US Bancorp PERP, you can compare the effects of market volatilities on Jyske Bank and US Bancorp 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 Bank with a short position of US Bancorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Bank and US Bancorp.
Diversification Opportunities for Jyske Bank and US Bancorp
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Jyske and USB-PA is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and US Bancorp PERP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on US Bancorp PERP and Jyske Bank 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 Bank AS are associated (or correlated) with US Bancorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of US Bancorp PERP has no effect on the direction of Jyske Bank i.e., Jyske Bank and US Bancorp go up and down completely randomly.
Pair Corralation between Jyske Bank and US Bancorp
Assuming the 90 days horizon Jyske Bank is expected to generate 3.23 times less return on investment than US Bancorp. But when comparing it to its historical volatility, Jyske Bank AS is 4.56 times less risky than US Bancorp. It trades about 0.16 of its potential returns per unit of risk. US Bancorp PERP is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 83,596 in US Bancorp PERP on January 25, 2024 and sell it today you would earn a total of 4,404 from holding US Bancorp PERP or generate 5.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 97.62% |
| Values | Daily Returns |
Jyske Bank AS vs. US Bancorp PERP
Performance |
| Timeline |
| Jyske Bank AS |
| US Bancorp PERP |
Jyske Bank and US Bancorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Jyske Bank and US Bancorp
The main advantage of trading using opposite Jyske Bank and US Bancorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jyske Bank position performs unexpectedly, US Bancorp 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 US Bancorp will offset losses from the drop in US Bancorp's long position.| Jyske Bank vs. Bank Rakyat | Jyske Bank vs. Lloyds Banking Group | Jyske Bank vs. Western Alliance Bancorporation | Jyske Bank vs. JAPAN POST BANK |
| US Bancorp vs. KeyCorp | US Bancorp vs. Regions Financial | US Bancorp vs. Citizens Financial Group | US Bancorp vs. US Bancorp |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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