Correlation Between Scandinavian Tobacco and GB Group
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and GB Group 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 Scandinavian Tobacco and GB Group into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandinavian Tobacco Group and GB Group plc, you can compare the effects of market volatilities on Scandinavian Tobacco and GB Group 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 Scandinavian Tobacco with a short position of GB Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and GB Group.
Diversification Opportunities for Scandinavian Tobacco and GB Group
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scandinavian and 0GB is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and GB Group plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GB Group plc and Scandinavian Tobacco 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 Scandinavian Tobacco Group are associated (or correlated) with GB Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GB Group plc has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and GB Group go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and GB Group
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to generate 0.88 times more return on investment than GB Group. However, Scandinavian Tobacco Group is 1.14 times less risky than GB Group. It trades about 0.25 of its potential returns per unit of risk. GB Group plc is currently generating about -0.06 per unit of risk. 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 Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. GB Group plc
Performance |
| Timeline |
| Scandinavian Tobacco |
| GB Group plc |
Scandinavian Tobacco and GB Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and GB Group
The main advantage of trading using opposite Scandinavian Tobacco and GB Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, GB Group 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 GB Group will offset losses from the drop in GB Group's long position.| Scandinavian Tobacco vs. Tradeweb Markets | Scandinavian Tobacco vs. United Rentals | Scandinavian Tobacco vs. TRADELINK ELECTRON | Scandinavian Tobacco vs. GRENKELEASING Dusseldorf |
| GB Group vs. SIDETRADE EO 1 | GB Group vs. Scandinavian Tobacco Group | GB Group vs. Fast Retailing Co | GB Group vs. CVW CLEANTECH 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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Portfolio Manager State of the art Portfolio Manager to monitor and improve performance of your invested capital | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities | |
| Analyst Advice Analyst recommendations and target price estimates broken down by several categories | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency |