Correlation Between Bang Olufsen and PARKEN Sport
Can any of the company-specific risk be diversified away by investing in both Bang Olufsen and PARKEN Sport 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 PARKEN Sport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bang Olufsen and PARKEN Sport Entertainment, you can compare the effects of market volatilities on Bang Olufsen and PARKEN Sport 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 PARKEN Sport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bang Olufsen and PARKEN Sport.
Diversification Opportunities for Bang Olufsen and PARKEN Sport
0.44 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Bang and PARKEN is 0.44. Overlapping area represents the amount of risk that can be diversified away by holding Bang Olufsen and PARKEN Sport Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PARKEN Sport Enterta 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 PARKEN Sport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PARKEN Sport Enterta has no effect on the direction of Bang Olufsen i.e., Bang Olufsen and PARKEN Sport go up and down completely randomly.
Pair Corralation between Bang Olufsen and PARKEN Sport
Assuming the 90 days horizon Bang Olufsen is expected to generate 0.91 times more return on investment than PARKEN Sport. However, Bang Olufsen is 1.1 times less risky than PARKEN Sport. It trades about 0.09 of its potential returns per unit of risk. PARKEN Sport Entertainment is currently generating about -0.07 per unit of risk. If you would invest 903.00 in Bang Olufsen on August 29, 2024 and sell it today you would earn a total of 23.00 from holding Bang Olufsen or generate 2.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bang Olufsen vs. PARKEN Sport Entertainment
Performance |
| Timeline |
| Bang Olufsen |
| PARKEN Sport Enterta |
Bang Olufsen and PARKEN Sport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bang Olufsen and PARKEN Sport
The main advantage of trading using opposite Bang Olufsen and PARKEN Sport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bang Olufsen position performs unexpectedly, PARKEN Sport 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 PARKEN Sport will offset losses from the drop in PARKEN Sport's long position.| Bang Olufsen vs. FLSmidth Co | Bang Olufsen vs. Ambu AS | Bang Olufsen vs. GN Store Nord | Bang Olufsen vs. ISS AS |
| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT AS |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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