Correlation Between NKT AS and Bang Olufsen
Can any of the company-specific risk be diversified away by investing in both NKT AS 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 NKT AS and Bang Olufsen into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NKT AS and Bang Olufsen, you can compare the effects of market volatilities on NKT AS 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 NKT AS with a short position of Bang Olufsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of NKT AS and Bang Olufsen.
Diversification Opportunities for NKT AS and Bang Olufsen
-0.09 | Correlation Coefficient |
Good diversification
The 3 months correlation between NKT and Bang is -0.09. Overlapping area represents the amount of risk that can be diversified away by holding NKT AS and Bang Olufsen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bang Olufsen and NKT AS 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 NKT 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 NKT AS i.e., NKT AS and Bang Olufsen go up and down completely randomly.
Pair Corralation between NKT AS and Bang Olufsen
Assuming the 90 days trading horizon NKT AS is expected to generate 0.8 times more return on investment than Bang Olufsen. However, NKT AS is 1.24 times less risky than Bang Olufsen. It trades about 0.06 of its potential returns per unit of risk. Bang Olufsen is currently generating about 0.01 per unit of risk. If you would invest 34,909 in NKT AS on August 25, 2024 and sell it today you would earn a total of 20,691 from holding NKT AS or generate 59.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NKT AS vs. Bang Olufsen
Performance |
| Timeline |
| NKT AS |
| Bang Olufsen |
NKT AS and Bang Olufsen Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NKT AS and Bang Olufsen
The main advantage of trading using opposite NKT AS and Bang Olufsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NKT AS 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.| NKT AS vs. FLSmidth Co | NKT AS vs. GN Store Nord | NKT AS vs. DSV Panalpina AS | NKT AS vs. ROCKWOOL International 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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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