Correlation Between Scandinavian Tobacco and Uniper SE
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Uniper SE 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 Uniper SE 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 Uniper SE, you can compare the effects of market volatilities on Scandinavian Tobacco and Uniper SE 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 Uniper SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Uniper SE.
Diversification Opportunities for Scandinavian Tobacco and Uniper SE
0.67 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scandinavian and Uniper is 0.67. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Uniper SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Uniper SE 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 Uniper SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Uniper SE has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Uniper SE go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Uniper SE
Assuming the 90 days trading horizon Scandinavian Tobacco Group is expected to generate 0.34 times more return on investment than Uniper SE. However, Scandinavian Tobacco Group is 2.94 times less risky than Uniper SE. It trades about 0.0 of its potential returns per unit of risk. Uniper SE is currently generating about -0.01 per unit of risk. If you would invest 11,353 in Scandinavian Tobacco Group on November 30, 2024 and sell it today you would lose (433.00) from holding Scandinavian Tobacco Group or give up 3.81% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. Uniper SE
Performance |
| Timeline |
| Scandinavian Tobacco |
| Uniper SE |
Scandinavian Tobacco and Uniper SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Uniper SE
The main advantage of trading using opposite Scandinavian Tobacco and Uniper SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Uniper SE 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 Uniper SE will offset losses from the drop in Uniper SE's long position.| Scandinavian Tobacco vs. FinecoBank SpA | Scandinavian Tobacco vs. Liechtensteinische Landesbank AG | Scandinavian Tobacco vs. Sunny Optical Technology | Scandinavian Tobacco vs. Costco Wholesale Corp |
| Uniper SE vs. Kinnevik Investment AB | Uniper SE vs. Heavitree Brewery | Uniper SE vs. Tavistock Investments Plc | Uniper SE vs. Smithson Investment Trust |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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