Correlation Between Danske Bank and Bang Olufsen
Can any of the company-specific risk be diversified away by investing in both Danske 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 Danske 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 Danske Bank AS and Bang Olufsen, you can compare the effects of market volatilities on Danske 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 Danske Bank with a short position of Bang Olufsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Danske Bank and Bang Olufsen.
Diversification Opportunities for Danske Bank and Bang Olufsen
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Danske and Bang is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Danske 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 Danske 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 Danske 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 Danske Bank i.e., Danske Bank and Bang Olufsen go up and down completely randomly.
Pair Corralation between Danske Bank and Bang Olufsen
Assuming the 90 days trading horizon Danske Bank is expected to generate 14.54 times less return on investment than Bang Olufsen. But when comparing it to its historical volatility, Danske Bank AS is 1.13 times less risky than Bang Olufsen. It trades about 0.01 of its potential returns per unit of risk. Bang Olufsen is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 919.00 in Bang Olufsen on September 1, 2024 and sell it today you would earn a total of 58.00 from holding Bang Olufsen or generate 6.31% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
Danske Bank AS vs. Bang Olufsen
Performance |
| Timeline |
| Danske Bank AS |
| Bang Olufsen |
Danske Bank and Bang Olufsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Danske Bank and Bang Olufsen
The main advantage of trading using opposite Danske Bank and Bang Olufsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Danske 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.| Danske Bank vs. Bavarian Nordic | Danske Bank vs. DSV Panalpina AS | Danske Bank vs. Vestas Wind Systems | Danske Bank vs. Ambu AS |
| Bang Olufsen vs. Broendbyernes IF Fodbold | Bang Olufsen vs. Matas AS | Bang Olufsen vs. NKT AS | Bang Olufsen vs. Jyske Bank 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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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