Correlation Between Ion Beam and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Ion Beam 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 Ion Beam and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ion Beam Applications and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Ion Beam 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 Ion Beam with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ion Beam and Scandinavian Tobacco.
Diversification Opportunities for Ion Beam and Scandinavian Tobacco
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between Ion and Scandinavian is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding Ion Beam Applications and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Ion Beam 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 Ion Beam Applications 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 Ion Beam i.e., Ion Beam and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Ion Beam and Scandinavian Tobacco
Assuming the 90 days trading horizon Ion Beam Applications is expected to generate 1.86 times more return on investment than Scandinavian Tobacco. However, Ion Beam is 1.86 times more volatile than Scandinavian Tobacco Group. It trades about 0.04 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about -0.02 per unit of risk. If you would invest 1,082 in Ion Beam Applications on September 14, 2024 and sell it today you would earn a total of 257.00 from holding Ion Beam Applications or generate 23.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ion Beam Applications vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Ion Beam Applications |
| Scandinavian Tobacco |
Ion Beam and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ion Beam and Scandinavian Tobacco
The main advantage of trading using opposite Ion Beam and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ion Beam 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.| Ion Beam vs. Finnair Oyj | Ion Beam vs. Wizz Air Holdings | Ion Beam vs. Infrastrutture Wireless Italiane | Ion Beam vs. Associated British Foods |
| Scandinavian Tobacco vs. Aurora Investment Trust | Scandinavian Tobacco vs. Blackrock World Mining | Scandinavian Tobacco vs. FC Investment Trust | Scandinavian Tobacco vs. METALL ZUG AG |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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