Correlation Between MITSUBISHI STEEL and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both MITSUBISHI STEEL and Scandinavian Tobacco 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 MITSUBISHI STEEL and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MITSUBISHI STEEL MFG and Scandinavian Tobacco Group, you can compare the effects of market volatilities on MITSUBISHI STEEL and Scandinavian Tobacco 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 MITSUBISHI STEEL with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of MITSUBISHI STEEL and Scandinavian Tobacco.
Diversification Opportunities for MITSUBISHI STEEL and Scandinavian Tobacco
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MITSUBISHI and Scandinavian is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding MITSUBISHI STEEL MFG and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and MITSUBISHI STEEL 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 MITSUBISHI STEEL MFG are associated (or correlated) with Scandinavian Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Tobacco has no effect on the direction of MITSUBISHI STEEL i.e., MITSUBISHI STEEL and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between MITSUBISHI STEEL and Scandinavian Tobacco
Assuming the 90 days horizon MITSUBISHI STEEL is expected to generate 185.0 times less return on investment than Scandinavian Tobacco. In addition to that, MITSUBISHI STEEL is 1.22 times more volatile than Scandinavian Tobacco Group. It trades about 0.0 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.01 per unit of volatility. If you would invest 1,260 in Scandinavian Tobacco Group on September 13, 2024 and sell it today you would earn a total of 10.00 from holding Scandinavian Tobacco Group or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MITSUBISHI STEEL MFG vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| MITSUBISHI STEEL MFG |
| Scandinavian Tobacco |
MITSUBISHI STEEL and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MITSUBISHI STEEL and Scandinavian Tobacco
The main advantage of trading using opposite MITSUBISHI STEEL and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MITSUBISHI STEEL position performs unexpectedly, Scandinavian Tobacco 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 Scandinavian Tobacco will offset losses from the drop in Scandinavian Tobacco's long position.| MITSUBISHI STEEL vs. Apple Inc | MITSUBISHI STEEL vs. Apple Inc | MITSUBISHI STEEL vs. Apple Inc | MITSUBISHI STEEL vs. Apple Inc |
| Scandinavian Tobacco vs. HomeToGo SE | Scandinavian Tobacco vs. Gruppo Mutuionline SpA | Scandinavian Tobacco vs. SIEM OFFSHORE NEW | Scandinavian Tobacco vs. Taylor Morrison Home |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing |