Correlation Between Scandinavian Tobacco and GreenX Metals
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and GreenX Metals 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 GreenX Metals 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 GreenX Metals, you can compare the effects of market volatilities on Scandinavian Tobacco and GreenX Metals 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 GreenX Metals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and GreenX Metals.
Diversification Opportunities for Scandinavian Tobacco and GreenX Metals
0.42 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scandinavian and GreenX is 0.42. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and GreenX Metals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenX Metals 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 GreenX Metals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenX Metals has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and GreenX Metals go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and GreenX Metals
Assuming the 90 days trading horizon Scandinavian Tobacco Group is expected to generate 0.93 times more return on investment than GreenX Metals. However, Scandinavian Tobacco Group is 1.08 times less risky than GreenX Metals. It trades about -0.14 of its potential returns per unit of risk. GreenX Metals is currently generating about -0.22 per unit of risk. If you would invest 10,340 in Scandinavian Tobacco Group on September 13, 2024 and sell it today you would lose (625.00) from holding Scandinavian Tobacco Group or give up 6.04% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. GreenX Metals
Performance |
| Timeline |
| Scandinavian Tobacco |
| GreenX Metals |
Scandinavian Tobacco and GreenX Metals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and GreenX Metals
The main advantage of trading using opposite Scandinavian Tobacco and GreenX Metals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, GreenX Metals 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 GreenX Metals will offset losses from the drop in GreenX Metals' long position.| Scandinavian Tobacco vs. Aurora Investment Trust | Scandinavian Tobacco vs. Orient Telecoms | Scandinavian Tobacco vs. Cairo Communication SpA | Scandinavian Tobacco vs. Blackstone Loan Financing |
| GreenX Metals vs. Givaudan SA | GreenX Metals vs. Antofagasta PLC | GreenX Metals vs. Ferrexpo PLC | GreenX Metals vs. Atalaya Mining |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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