Correlation Between Jyske Bank and Bang Olufsen

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

Diversification Opportunities for Jyske Bank and Bang Olufsen

0.71

Correlation Coefficient

Jyske Bank  Bang Olufsen

Poor diversification

The 3 months correlation between Jyske and Bang is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding Jyske Bank AS and Bang Olufsen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bang Olufsen 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 Bang Olufsen. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bang Olufsen has no effect on the direction of Jyske Bank i.e., Jyske Bank and Bang Olufsen go up and down completely randomly.

Pair Corralation between Jyske Bank and Bang Olufsen

Assuming the 90 days trading horizon Jyske Bank is expected to generate 2.94 times less return on investment than Bang Olufsen. But when comparing it to its historical volatility, Jyske Bank AS is 2.12 times less risky than Bang Olufsen. It trades about 0.17 of its potential returns per unit of risk. Bang Olufsen is currently generating about 0.23 of returns per unit of risk over similar time horizon. If you would invest  939.00  in Bang Olufsen on December 29, 2024 and sell it today you would earn a total of  441.00  from holding Bang Olufsen or generate 46.96% return on investment over 90 days.

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

Jyske Bank AS  vs.  Bang Olufsen

Jyske Bank AS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Jyske Bank AS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Jyske Bank displayed solid returns over the last few months and may actually be approaching a breakup point.

Bang Olufsen

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Bang Olufsen are ranked lower than 18 (%) of all global equities and portfolios over the last 90 days. In spite of very weak fundamental indicators, Bang Olufsen displayed solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Jyske Bank and Bang Olufsen

The main advantage of trading using opposite Jyske Bank and Bang Olufsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Jyske Bank position performs unexpectedly, Bang Olufsen 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 Bang Olufsen will offset losses from the drop in Bang Olufsen's long position.

The idea behind Jyske Bank AS and Bang Olufsen 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.