Correlation Between Global Ship and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Global Ship 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 Global Ship and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Global Ship Lease and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Global Ship 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 Global Ship with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Global Ship and Scandinavian Tobacco.
Diversification Opportunities for Global Ship and Scandinavian Tobacco
0.11 | Correlation Coefficient |
Average diversification
The 3 months correlation between Global and Scandinavian is 0.11. Overlapping area represents the amount of risk that can be diversified away by holding Global Ship Lease and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Global Ship 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 Global Ship Lease 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 Global Ship i.e., Global Ship and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Global Ship and Scandinavian Tobacco
Assuming the 90 days horizon Global Ship Lease is expected to generate 1.11 times more return on investment than Scandinavian Tobacco. However, Global Ship is 1.11 times more volatile than Scandinavian Tobacco Group. It trades about -0.07 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about -0.09 per unit of risk. If you would invest 2,210 in Global Ship Lease on September 3, 2024 and sell it today you would lose (178.00) from holding Global Ship Lease or give up 8.05% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Global Ship Lease vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Global Ship Lease |
| Scandinavian Tobacco |
Global Ship and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Global Ship and Scandinavian Tobacco
The main advantage of trading using opposite Global Ship and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Global Ship 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.| Global Ship vs. BW LPG Limited | Global Ship vs. Wilh Wilhelmsen Holding | Global Ship vs. Superior Plus Corp | Global Ship vs. NMI Holdings |
| Scandinavian Tobacco vs. British American Tobacco | Scandinavian Tobacco vs. Japan Tobacco | Scandinavian Tobacco vs. JAPAN TOBACCO UNSPADR12 | Scandinavian Tobacco vs. Imperial Brands PLC |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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