Correlation Between Scandinavian Tobacco and Litigation Capital
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Litigation Capital 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 Litigation Capital 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 Litigation Capital Management, you can compare the effects of market volatilities on Scandinavian Tobacco and Litigation Capital 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 Litigation Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Litigation Capital.
Diversification Opportunities for Scandinavian Tobacco and Litigation Capital
-0.56 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scandinavian and Litigation is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Litigation Capital Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Litigation Capital 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 Litigation Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Litigation Capital has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Litigation Capital go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Litigation Capital
Assuming the 90 days trading horizon Scandinavian Tobacco Group is expected to under-perform the Litigation Capital. In addition to that, Scandinavian Tobacco is 2.35 times more volatile than Litigation Capital Management. It trades about -0.08 of its total potential returns per unit of risk. Litigation Capital Management is currently generating about 0.27 per unit of volatility. If you would invest 11,050 in Litigation Capital Management on August 30, 2024 and sell it today you would earn a total of 525.00 from holding Litigation Capital Management or generate 4.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. Litigation Capital Management
Performance |
| Timeline |
| Scandinavian Tobacco |
| Litigation Capital |
Scandinavian Tobacco and Litigation Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Litigation Capital
The main advantage of trading using opposite Scandinavian Tobacco and Litigation Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Litigation Capital 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 Litigation Capital will offset losses from the drop in Litigation Capital's long position.| Scandinavian Tobacco vs. Lendinvest PLC | Scandinavian Tobacco vs. Neometals | Scandinavian Tobacco vs. Albion Technology General | Scandinavian Tobacco vs. Jupiter Fund Management |
| Litigation Capital vs. Toyota Motor Corp | Litigation Capital vs. Neometals | Litigation Capital vs. Coor Service Management | Litigation Capital vs. Jupiter Fund Management |
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 Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |