Correlation Between Jyske Bank and Visa
Can any of the company-specific risk be diversified away by investing in both Jyske Bank and Visa 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 Visa 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 Visa Class A, you can compare the effects of market volatilities on Jyske Bank and Visa 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 Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Jyske Bank and Visa.
Diversification Opportunities for Jyske Bank and Visa
-0.07 | Correlation Coefficient |
Good diversification
The 3 months correlation between Jyske and Visa is -0.07. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of Jyske Bank i.e., Jyske Bank and Visa go up and down completely randomly.
Pair Corralation between Jyske Bank and Visa
Assuming the 90 days horizon Jyske Bank AS is expected to generate 0.44 times more return on investment than Visa. However, Jyske Bank AS is 2.27 times less risky than Visa. It trades about 0.22 of its potential returns per unit of risk. Visa Class A is currently generating about -0.27 per unit of risk. If you would invest 1,406 in Jyske Bank AS on January 18, 2024 and sell it today you would earn a total of 23.00 from holding Jyske Bank AS or generate 1.64% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 95.45% |
Values | Daily Returns |
Jyske Bank AS vs. Visa Class A
Performance |
Timeline |
Jyske Bank AS |
Visa Class A |
Jyske Bank and Visa Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Jyske Bank and Visa
The main advantage of trading using opposite Jyske Bank and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jyske Bank position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.The idea behind Jyske Bank AS and Visa Class A 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.Visa vs. Diamond Hill Investment | Visa vs. Distoken Acquisition | Visa vs. AllianceBernstein Holding LP | Visa vs. Associated Capital Group |
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 Portfolio Backtesting module to avoid under-diversification and over-optimization by backtesting your portfolios.
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