Correlation Between Datagroup and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Datagroup 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 Datagroup and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Datagroup SE and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Datagroup 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 Datagroup with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Datagroup and Scandinavian Tobacco.
Diversification Opportunities for Datagroup and Scandinavian Tobacco
-0.5 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Datagroup and Scandinavian is -0.5. Overlapping area represents the amount of risk that can be diversified away by holding Datagroup SE and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Datagroup 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 Datagroup SE 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 Datagroup i.e., Datagroup and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Datagroup and Scandinavian Tobacco
Assuming the 90 days trading horizon Datagroup SE is expected to generate 2.98 times more return on investment than Scandinavian Tobacco. However, Datagroup is 2.98 times more volatile than Scandinavian Tobacco Group. It trades about 0.33 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.11 per unit of risk. If you would invest 3,755 in Datagroup SE on September 14, 2024 and sell it today you would earn a total of 845.00 from holding Datagroup SE or generate 22.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Datagroup SE vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Datagroup SE |
| Scandinavian Tobacco |
Datagroup and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Datagroup and Scandinavian Tobacco
The main advantage of trading using opposite Datagroup and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Datagroup 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.| Datagroup vs. Monster Beverage Corp | Datagroup vs. Allianz Technology Trust | Datagroup vs. Flow Traders NV | Datagroup vs. Albion Technology General |
| 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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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