Correlation Between Bang Olufsen and WindowMaster International
Can any of the company-specific risk be diversified away by investing in both Bang Olufsen and WindowMaster International 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 WindowMaster International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Bang Olufsen and WindowMaster International AS, you can compare the effects of market volatilities on Bang Olufsen and WindowMaster International 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 WindowMaster International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Bang Olufsen and WindowMaster International.
Diversification Opportunities for Bang Olufsen and WindowMaster International
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Bang and WindowMaster is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Bang Olufsen and WindowMaster International AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on WindowMaster International 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 WindowMaster International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of WindowMaster International has no effect on the direction of Bang Olufsen i.e., Bang Olufsen and WindowMaster International go up and down completely randomly.
Pair Corralation between Bang Olufsen and WindowMaster International
Assuming the 90 days horizon Bang Olufsen is expected to generate 0.74 times more return on investment than WindowMaster International. However, Bang Olufsen is 1.35 times less risky than WindowMaster International. It trades about 0.21 of its potential returns per unit of risk. WindowMaster International AS is currently generating about 0.03 per unit of risk. If you would invest 865.00 in Bang Olufsen on November 28, 2024 and sell it today you would earn a total of 561.00 from holding Bang Olufsen or generate 64.86% 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. WindowMaster International AS
Performance |
| Timeline |
| Bang Olufsen |
| WindowMaster International |
Bang Olufsen and WindowMaster International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Bang Olufsen and WindowMaster International
The main advantage of trading using opposite Bang Olufsen and WindowMaster International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Bang Olufsen position performs unexpectedly, WindowMaster International 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 WindowMaster International will offset losses from the drop in WindowMaster International'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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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