Correlation Between Scandinavian Tobacco and Event Hospitality
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Event Hospitality 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 Event Hospitality 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 Event Hospitality and, you can compare the effects of market volatilities on Scandinavian Tobacco and Event Hospitality 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 Event Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Event Hospitality.
Diversification Opportunities for Scandinavian Tobacco and Event Hospitality
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scandinavian and Event is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Event Hospitality and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Event Hospitality 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 Event Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Event Hospitality has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Event Hospitality go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Event Hospitality
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to generate 3.1 times more return on investment than Event Hospitality. However, Scandinavian Tobacco is 3.1 times more volatile than Event Hospitality and. It trades about 0.06 of its potential returns per unit of risk. Event Hospitality and is currently generating about 0.0 per unit of risk. If you would invest 435.00 in Scandinavian Tobacco Group on September 3, 2024 and sell it today you would earn a total of 839.00 from holding Scandinavian Tobacco Group or generate 192.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. Event Hospitality and
Performance |
| Timeline |
| Scandinavian Tobacco |
| Event Hospitality |
Scandinavian Tobacco and Event Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Event Hospitality
The main advantage of trading using opposite Scandinavian Tobacco and Event Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Event Hospitality 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 Event Hospitality will offset losses from the drop in Event Hospitality's long position.| Scandinavian Tobacco vs. British American Tobacco | Scandinavian Tobacco vs. JAPAN TOBACCO UNSPADR12 | Scandinavian Tobacco vs. Imperial Brands PLC |
| Event Hospitality vs. Southwest Airlines Co | Event Hospitality vs. SOUTHWEST AIRLINES | Event Hospitality vs. Australian Agricultural | Event Hospitality vs. SINGAPORE AIRLINES |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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