Correlation Between DKINYM and Jyske Invest

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

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

Diversification Opportunities for DKINYM and Jyske Invest

0.64

Correlation Coefficient

DKINYM  Jyske Invest

Poor diversification

The 3 months correlation between DKINYM and Jyske is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Investeringsforeningen Danske 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 DKINYM 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 Investeringsforeningen Danske Invest 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 DKINYM i.e., DKINYM and Jyske Invest go up and down completely randomly.

Pair Corralation between DKINYM and Jyske Invest

Assuming the 90 days trading horizon Investeringsforeningen Danske Invest is expected to generate 1.81 times more return on investment than Jyske Invest. However, DKINYM is 1.81 times more volatile than Jyske Invest Nye. It trades about 0.1 of its potential returns per unit of risk. Jyske Invest Nye is currently generating about -0.14 per unit of risk. If you would invest  18,611  in Investeringsforeningen Danske Invest on February 7, 2024 and sell it today you would earn a total of  359.00  from holding Investeringsforeningen Danske Invest or generate 1.93% return on investment over 90 days.

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

Investeringsforeningen Danske   vs.  Jyske Invest Nye

Investeringsforeningen

Risk-Adjusted Performance

11 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Investeringsforeningen Danske Invest are ranked lower than 11 (%) of all funds and portfolios of funds over the last 90 days. Despite somewhat weak basic indicators, DKINYM may actually be approaching a critical reversion point that can send shares even higher in June 2024.

Jyske Invest Nye

Risk-Adjusted Performance

2 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Invest Nye are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Jyske Invest is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with DKINYM and Jyske Invest

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

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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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.