Correlation Between Sydbank AS and Bang Olufsen

Can any of the company-specific risk be diversified away by investing in both Sydbank 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 Sydbank 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 Sydbank AS and Bang Olufsen, you can compare the effects of market volatilities on Sydbank 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 Sydbank AS with a short position of Bang Olufsen. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sydbank AS and Bang Olufsen.

Diversification Opportunities for Sydbank AS and Bang Olufsen

0.66

Correlation Coefficient

Sydbank AS  Bang Olufsen

Poor diversification

The 3 months correlation between Sydbank and Bang is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Sydbank AS and Bang Olufsen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bang Olufsen and Sydbank 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 Sydbank 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 Sydbank AS i.e., Sydbank AS and Bang Olufsen go up and down completely randomly.

Pair Corralation between Sydbank AS and Bang Olufsen

Assuming the 90 days trading horizon Sydbank AS is expected to generate 0.79 times more return on investment than Bang Olufsen. However, Sydbank AS is 1.26 times less risky than Bang Olufsen. It trades about 0.14 of its potential returns per unit of risk. Bang Olufsen is currently generating about 0.03 per unit of risk. If you would invest  41,880  in Sydbank AS on April 25, 2025 and sell it today you would earn a total of  5,600  from holding Sydbank AS or generate 13.37% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Sydbank AS  vs.  Bang Olufsen

Sydbank AS

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Sydbank AS are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of very unfluctuating basic indicators, Sydbank AS displayed solid returns over the last few months and may actually be approaching a breakup point.

Bang Olufsen

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Bang Olufsen are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of very healthy fundamental indicators, Bang Olufsen is not utilizing all of its potentials. The newest stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Sydbank AS and Bang Olufsen

The main advantage of trading using opposite Sydbank AS and Bang Olufsen positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sydbank 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.

The idea behind Sydbank AS and Bang Olufsen pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.