Correlation Between Scandinavian Tobacco and GLOBAL COSMED
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and GLOBAL COSMED 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 GLOBAL COSMED 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 GLOBAL MED SA, you can compare the effects of market volatilities on Scandinavian Tobacco and GLOBAL COSMED 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 GLOBAL COSMED. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and GLOBAL COSMED.
Diversification Opportunities for Scandinavian Tobacco and GLOBAL COSMED
0.21 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scandinavian and GLOBAL is 0.21. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and GLOBAL MED SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GLOBAL MED SA 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 GLOBAL COSMED. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GLOBAL MED SA has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and GLOBAL COSMED go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and GLOBAL COSMED
Assuming the 90 days horizon Scandinavian Tobacco is expected to generate 1.01 times less return on investment than GLOBAL COSMED. In addition to that, Scandinavian Tobacco is 2.1 times more volatile than GLOBAL MED SA. It trades about 0.06 of its total potential returns per unit of risk. GLOBAL MED SA is currently generating about 0.12 per unit of volatility. If you would invest 59.00 in GLOBAL MED SA on November 3, 2024 and sell it today you would earn a total of 65.00 from holding GLOBAL MED SA or generate 110.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 99.6% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. GLOBAL MED SA
Performance |
| Timeline |
| Scandinavian Tobacco |
| GLOBAL MED SA |
Scandinavian Tobacco and GLOBAL COSMED Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and GLOBAL COSMED
The main advantage of trading using opposite Scandinavian Tobacco and GLOBAL COSMED positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, GLOBAL COSMED 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 GLOBAL COSMED will offset losses from the drop in GLOBAL COSMED's long position.| Scandinavian Tobacco vs. Delta Air Lines | Scandinavian Tobacco vs. FORWARD AIR P | Scandinavian Tobacco vs. Nomad Foods | Scandinavian Tobacco vs. LIFEWAY FOODS |
| GLOBAL COSMED vs. Yanzhou Coal Mining | GLOBAL COSMED vs. GALENA MINING LTD | GLOBAL COSMED vs. MCEWEN MINING INC | GLOBAL COSMED vs. Singapore Airlines Limited |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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