Correlation Between PKSHA TECHNOLOGY and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PKSHA TECHNOLOGY INC and Scandinavian Tobacco Group, you can compare the effects of market volatilities on PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of PKSHA TECHNOLOGY and Scandinavian Tobacco.
Diversification Opportunities for PKSHA TECHNOLOGY and Scandinavian Tobacco
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between PKSHA and Scandinavian is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding PKSHA TECHNOLOGY INC and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and PKSHA TECHNOLOGY 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 PKSHA TECHNOLOGY INC 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 PKSHA TECHNOLOGY i.e., PKSHA TECHNOLOGY and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between PKSHA TECHNOLOGY and Scandinavian Tobacco
Assuming the 90 days horizon PKSHA TECHNOLOGY is expected to generate 1.59 times less return on investment than Scandinavian Tobacco. But when comparing it to its historical volatility, PKSHA TECHNOLOGY INC is 1.47 times less risky than Scandinavian Tobacco. It trades about 0.06 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 415.00 in Scandinavian Tobacco Group on October 12, 2024 and sell it today you would earn a total of 873.00 from holding Scandinavian Tobacco Group or generate 210.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
PKSHA TECHNOLOGY INC vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| PKSHA TECHNOLOGY INC |
| Scandinavian Tobacco |
PKSHA TECHNOLOGY and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PKSHA TECHNOLOGY and Scandinavian Tobacco
The main advantage of trading using opposite PKSHA TECHNOLOGY and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PKSHA TECHNOLOGY 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.| PKSHA TECHNOLOGY vs. Virtu Financial | PKSHA TECHNOLOGY vs. Synovus Financial Corp | PKSHA TECHNOLOGY vs. Air Lease | PKSHA TECHNOLOGY vs. Cincinnati Financial Corp |
| Scandinavian Tobacco vs. ORMAT TECHNOLOGIES | Scandinavian Tobacco vs. PKSHA TECHNOLOGY INC | Scandinavian Tobacco vs. OURGAME INTHOLDL 00005 | Scandinavian Tobacco vs. CONTAGIOUS GAMING INC |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
Other Complementary Tools
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |