Correlation Between Scandinavian Tobacco and VITEC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and VITEC SOFTWARE 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 VITEC SOFTWARE 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 VITEC SOFTWARE GROUP, you can compare the effects of market volatilities on Scandinavian Tobacco and VITEC SOFTWARE 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 VITEC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and VITEC SOFTWARE.
Diversification Opportunities for Scandinavian Tobacco and VITEC SOFTWARE
0.04 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Scandinavian and VITEC is 0.04. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and VITEC SOFTWARE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VITEC SOFTWARE GROUP 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 VITEC SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VITEC SOFTWARE GROUP has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and VITEC SOFTWARE go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and VITEC SOFTWARE
Assuming the 90 days horizon Scandinavian Tobacco is expected to generate 2.23 times less return on investment than VITEC SOFTWARE. In addition to that, Scandinavian Tobacco is 1.19 times more volatile than VITEC SOFTWARE GROUP. It trades about 0.05 of its total potential returns per unit of risk. VITEC SOFTWARE GROUP is currently generating about 0.13 per unit of volatility. If you would invest 4,230 in VITEC SOFTWARE GROUP on September 15, 2024 and sell it today you would earn a total of 196.00 from holding VITEC SOFTWARE GROUP or generate 4.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. VITEC SOFTWARE GROUP
Performance |
| Timeline |
| Scandinavian Tobacco |
| VITEC SOFTWARE GROUP |
Scandinavian Tobacco and VITEC SOFTWARE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and VITEC SOFTWARE
The main advantage of trading using opposite Scandinavian Tobacco and VITEC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, VITEC SOFTWARE 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 VITEC SOFTWARE will offset losses from the drop in VITEC SOFTWARE's long position.| Scandinavian Tobacco vs. DISTRICT METALS | Scandinavian Tobacco vs. CVS Health | Scandinavian Tobacco vs. PARKEN Sport Entertainment | Scandinavian Tobacco vs. Lion One Metals |
| VITEC SOFTWARE vs. Scandinavian Tobacco Group | VITEC SOFTWARE vs. ADRIATIC METALS LS 013355 | VITEC SOFTWARE vs. KENNAMETAL INC | VITEC SOFTWARE vs. Federal Agricultural Mortgage |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal |