Correlation Between SIDETRADE and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both SIDETRADE 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 SIDETRADE and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between SIDETRADE EO 1 and Scandinavian Tobacco Group, you can compare the effects of market volatilities on SIDETRADE 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 SIDETRADE with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of SIDETRADE and Scandinavian Tobacco.
Diversification Opportunities for SIDETRADE and Scandinavian Tobacco
0.18 | Correlation Coefficient |
Average diversification
The 3 months correlation between SIDETRADE and Scandinavian is 0.18. Overlapping area represents the amount of risk that can be diversified away by holding SIDETRADE EO 1 and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and SIDETRADE 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 SIDETRADE EO 1 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 SIDETRADE i.e., SIDETRADE and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between SIDETRADE and Scandinavian Tobacco
Assuming the 90 days horizon SIDETRADE is expected to generate 1.88 times less return on investment than Scandinavian Tobacco. But when comparing it to its historical volatility, SIDETRADE EO 1 is 1.15 times less risky than Scandinavian Tobacco. It trades about 0.16 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 1,242 in Scandinavian Tobacco Group on October 23, 2024 and sell it today you would earn a total of 76.00 from holding Scandinavian Tobacco Group or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
SIDETRADE EO 1 vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| SIDETRADE EO 1 |
| Scandinavian Tobacco |
SIDETRADE and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with SIDETRADE and Scandinavian Tobacco
The main advantage of trading using opposite SIDETRADE and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if SIDETRADE 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.| SIDETRADE vs. AGRICULTBK HADR25 YC | SIDETRADE vs. Dairy Farm International | SIDETRADE vs. Chongqing Machinery Electric | SIDETRADE vs. Daito Trust Construction |
| Scandinavian Tobacco vs. Tradeweb Markets | Scandinavian Tobacco vs. United Rentals | Scandinavian Tobacco vs. TRADELINK ELECTRON | Scandinavian Tobacco vs. GRENKELEASING Dusseldorf |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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