Correlation Between Scandinavian Tobacco and Mobilezone Holding
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Mobilezone Holding 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 Scandinavian Tobacco and Mobilezone Holding into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandinavian Tobacco Group and mobilezone holding AG, you can compare the effects of market volatilities on Scandinavian Tobacco and Mobilezone Holding 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 Scandinavian Tobacco with a short position of Mobilezone Holding. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Mobilezone Holding.
Diversification Opportunities for Scandinavian Tobacco and Mobilezone Holding
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Scandinavian and Mobilezone is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and mobilezone holding AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on mobilezone holding and Scandinavian Tobacco 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 Scandinavian Tobacco Group are associated (or correlated) with Mobilezone Holding. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of mobilezone holding has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Mobilezone Holding go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Mobilezone Holding
Assuming the 90 days trading horizon Scandinavian Tobacco Group is expected to generate 0.95 times more return on investment than Mobilezone Holding. However, Scandinavian Tobacco Group is 1.05 times less risky than Mobilezone Holding. It trades about -0.01 of its potential returns per unit of risk. mobilezone holding AG is currently generating about -0.05 per unit of risk. If you would invest 10,911 in Scandinavian Tobacco Group on September 24, 2024 and sell it today you would lose (1,511) from holding Scandinavian Tobacco Group or give up 13.85% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.8% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. mobilezone holding AG
Performance |
| Timeline |
| Scandinavian Tobacco |
| mobilezone holding |
Scandinavian Tobacco and Mobilezone Holding Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Mobilezone Holding
The main advantage of trading using opposite Scandinavian Tobacco and Mobilezone Holding positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Mobilezone Holding 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 Mobilezone Holding will offset losses from the drop in Mobilezone Holding's long position.| Scandinavian Tobacco vs. Zegona Communications Plc | Scandinavian Tobacco vs. Hochschild Mining plc | Scandinavian Tobacco vs. Griffin Mining | Scandinavian Tobacco vs. Datagroup SE |
| Mobilezone Holding vs. Spotify Technology SA | Mobilezone Holding vs. Telecom Italia SpA | Mobilezone Holding vs. Scandinavian Tobacco Group | Mobilezone Holding vs. British American Tobacco |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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