Correlation Between Scandinavian Tobacco and SILVER BULLET
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and SILVER BULLET 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 SILVER BULLET 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 SILVER BULLET DATA, you can compare the effects of market volatilities on Scandinavian Tobacco and SILVER BULLET 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 SILVER BULLET. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and SILVER BULLET.
Diversification Opportunities for Scandinavian Tobacco and SILVER BULLET
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Scandinavian and SILVER is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and SILVER BULLET DATA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SILVER BULLET DATA 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 SILVER BULLET. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SILVER BULLET DATA has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and SILVER BULLET go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and SILVER BULLET
Assuming the 90 days horizon Scandinavian Tobacco is expected to generate 10.02 times less return on investment than SILVER BULLET. But when comparing it to its historical volatility, Scandinavian Tobacco Group is 1.67 times less risky than SILVER BULLET. It trades about 0.03 of its potential returns per unit of risk. SILVER BULLET DATA is currently generating about 0.16 of returns per unit of risk over similar time horizon. If you would invest 67.00 in SILVER BULLET DATA on October 12, 2024 and sell it today you would earn a total of 4.00 from holding SILVER BULLET DATA or generate 5.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. SILVER BULLET DATA
Performance |
| Timeline |
| Scandinavian Tobacco |
| SILVER BULLET DATA |
Scandinavian Tobacco and SILVER BULLET Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and SILVER BULLET
The main advantage of trading using opposite Scandinavian Tobacco and SILVER BULLET positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, SILVER BULLET 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 SILVER BULLET will offset losses from the drop in SILVER BULLET's long position.| Scandinavian Tobacco vs. ORMAT TECHNOLOGIES | Scandinavian Tobacco vs. PKSHA TECHNOLOGY INC | Scandinavian Tobacco vs. OURGAME INTHOLDL 00005 | Scandinavian Tobacco vs. CONTAGIOUS GAMING INC |
| SILVER BULLET vs. MEDICAL FACILITIES NEW | SILVER BULLET vs. IMPERIAL TOBACCO | SILVER BULLET vs. Scandinavian Tobacco Group | SILVER BULLET vs. Zoom Video Communications |
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 Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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