Correlation Between XLMedia PLC and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both XLMedia PLC 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 XLMedia PLC and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between XLMedia PLC and Scandinavian Tobacco Group, you can compare the effects of market volatilities on XLMedia PLC 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 XLMedia PLC with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of XLMedia PLC and Scandinavian Tobacco.
Diversification Opportunities for XLMedia PLC and Scandinavian Tobacco
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between XLMedia and Scandinavian is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding XLMedia PLC and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and XLMedia PLC 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 XLMedia PLC 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 XLMedia PLC i.e., XLMedia PLC and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between XLMedia PLC and Scandinavian Tobacco
Assuming the 90 days horizon XLMedia PLC is expected to generate 0.66 times more return on investment than Scandinavian Tobacco. However, XLMedia PLC is 1.51 times less risky than Scandinavian Tobacco. It trades about 0.21 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 13.00 in XLMedia PLC on September 1, 2024 and sell it today you would earn a total of 1.00 from holding XLMedia PLC or generate 7.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
XLMedia PLC vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| XLMedia PLC |
| Scandinavian Tobacco |
XLMedia PLC and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with XLMedia PLC and Scandinavian Tobacco
The main advantage of trading using opposite XLMedia PLC and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if XLMedia PLC 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.| XLMedia PLC vs. FLOW TRADERS LTD | XLMedia PLC vs. Auto Trader Group | XLMedia PLC vs. Carsales | XLMedia PLC vs. CarsalesCom |
| Scandinavian Tobacco vs. Darden Restaurants | Scandinavian Tobacco vs. Hanison Construction Holdings | Scandinavian Tobacco vs. NorAm Drilling AS | Scandinavian Tobacco vs. BORR DRILLING NEW |
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 Valuation module to check real value of public entities based on technical and fundamental data.
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