Correlation Between Bang Olufsen and Prime Office
Can any of the company-specific risk be diversified away by investing in both Bang Olufsen and Prime Office 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 Prime Office into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bang Olufsen and Prime Office AS, you can compare the effects of market volatilities on Bang Olufsen and Prime Office 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 Prime Office. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bang Olufsen and Prime Office.
Diversification Opportunities for Bang Olufsen and Prime Office
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Bang and Prime is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Bang Olufsen and Prime Office AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Prime Office AS 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 Prime Office. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Prime Office AS has no effect on the direction of Bang Olufsen i.e., Bang Olufsen and Prime Office go up and down completely randomly.
Pair Corralation between Bang Olufsen and Prime Office
Assuming the 90 days horizon Bang Olufsen is expected to generate 1.97 times more return on investment than Prime Office. However, Bang Olufsen is 1.97 times more volatile than Prime Office AS. It trades about 0.44 of its potential returns per unit of risk. Prime Office AS is currently generating about -0.31 per unit of risk. If you would invest 1,204 in Bang Olufsen on November 27, 2024 and sell it today you would earn a total of 276.00 from holding Bang Olufsen or generate 22.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Bang Olufsen vs. Prime Office AS
Performance |
| Timeline |
| Bang Olufsen |
| Prime Office AS |
Bang Olufsen and Prime Office Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bang Olufsen and Prime Office
The main advantage of trading using opposite Bang Olufsen and Prime Office positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bang Olufsen position performs unexpectedly, Prime Office 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 Prime Office will offset losses from the drop in Prime Office's long position.| Bang Olufsen vs. FLSmidth Co | Bang Olufsen vs. Ambu AS | Bang Olufsen vs. GN Store Nord | Bang Olufsen vs. ISS AS |
| Prime Office vs. Djurslands Bank | Prime Office vs. North Media AS | Prime Office vs. First Farms AS | Prime Office vs. Flgger group 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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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