Correlation Between Scandinavian Tobacco and DICKS Sporting
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and DICKS Sporting 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 DICKS Sporting 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 DICKS Sporting Goods, you can compare the effects of market volatilities on Scandinavian Tobacco and DICKS Sporting 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 DICKS Sporting. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and DICKS Sporting.
Diversification Opportunities for Scandinavian Tobacco and DICKS Sporting
0.32 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Scandinavian and DICKS is 0.32. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and DICKS Sporting Goods in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DICKS Sporting Goods 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 DICKS Sporting. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DICKS Sporting Goods has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and DICKS Sporting go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and DICKS Sporting
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to generate 2.13 times more return on investment than DICKS Sporting. However, Scandinavian Tobacco is 2.13 times more volatile than DICKS Sporting Goods. It trades about 0.06 of its potential returns per unit of risk. DICKS Sporting Goods is currently generating about 0.06 per unit of risk. If you would invest 468.00 in Scandinavian Tobacco Group on August 25, 2024 and sell it today you would earn a total of 812.00 from holding Scandinavian Tobacco Group or generate 173.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. DICKS Sporting Goods
Performance |
| Timeline |
| Scandinavian Tobacco |
| DICKS Sporting Goods |
Scandinavian Tobacco and DICKS Sporting Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and DICKS Sporting
The main advantage of trading using opposite Scandinavian Tobacco and DICKS Sporting positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, DICKS Sporting 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 DICKS Sporting will offset losses from the drop in DICKS Sporting's long position.| Scandinavian Tobacco vs. TFS FINANCIAL | Scandinavian Tobacco vs. PT Bank Maybank | Scandinavian Tobacco vs. CHIBA BANK | Scandinavian Tobacco vs. Kaiser Aluminum |
| DICKS Sporting vs. Scandinavian Tobacco Group | DICKS Sporting vs. Sunstone Hotel Investors | DICKS Sporting vs. SHELF DRILLING LTD | DICKS Sporting vs. Regal Hotels International |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
Other Complementary Tools
| Commodity Channel Use Commodity Channel Index to analyze current equity momentum | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |