Correlation Between Bang Olufsen and Silkeborg
Can any of the company-specific risk be diversified away by investing in both Bang Olufsen and Silkeborg 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 Bang Olufsen and Silkeborg into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bang Olufsen and Silkeborg IF Invest, you can compare the effects of market volatilities on Bang Olufsen and Silkeborg 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 Bang Olufsen with a short position of Silkeborg. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bang Olufsen and Silkeborg.
Diversification Opportunities for Bang Olufsen and Silkeborg
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bang and Silkeborg is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Bang Olufsen and Silkeborg IF Invest in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Silkeborg IF Invest and Bang Olufsen 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 Bang Olufsen are associated (or correlated) with Silkeborg. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Silkeborg IF Invest has no effect on the direction of Bang Olufsen i.e., Bang Olufsen and Silkeborg go up and down completely randomly.
Pair Corralation between Bang Olufsen and Silkeborg
Assuming the 90 days horizon Bang Olufsen is expected to generate 3.68 times less return on investment than Silkeborg. But when comparing it to its historical volatility, Bang Olufsen is 1.11 times less risky than Silkeborg. It trades about 0.03 of its potential returns per unit of risk. Silkeborg IF Invest is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 1,720 in Silkeborg IF Invest on December 4, 2024 and sell it today you would earn a total of 2,720 from holding Silkeborg IF Invest or generate 158.14% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Strong |
Accuracy | 100.0% |
Values | Daily Returns |
Bang Olufsen vs. Silkeborg IF Invest
Performance |
Timeline |
Bang Olufsen |
Silkeborg IF Invest |
Bang Olufsen and Silkeborg Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Bang Olufsen and Silkeborg
The main advantage of trading using opposite Bang Olufsen and Silkeborg positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bang Olufsen position performs unexpectedly, Silkeborg 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 Silkeborg will offset losses from the drop in Silkeborg's long position.Bang Olufsen vs. FLSmidth Co | Bang Olufsen vs. Ambu AS | Bang Olufsen vs. GN Store Nord | Bang Olufsen vs. ISS AS |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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