Correlation Between Scandinavian Tobacco and ADHI KARYA
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and ADHI KARYA 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 ADHI KARYA 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 ADHI KARYA, you can compare the effects of market volatilities on Scandinavian Tobacco and ADHI KARYA 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 ADHI KARYA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and ADHI KARYA.
Diversification Opportunities for Scandinavian Tobacco and ADHI KARYA
-0.66 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scandinavian and ADHI is -0.66. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and ADHI KARYA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADHI KARYA 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 ADHI KARYA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADHI KARYA has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and ADHI KARYA go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and ADHI KARYA
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to under-perform the ADHI KARYA. But the stock apears to be less risky and, when comparing its historical volatility, Scandinavian Tobacco Group is 6.52 times less risky than ADHI KARYA. The stock trades about -0.11 of its potential returns per unit of risk. The ADHI KARYA is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 0.85 in ADHI KARYA on September 2, 2024 and sell it today you would earn a total of 0.35 from holding ADHI KARYA or generate 41.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. ADHI KARYA
Performance |
| Timeline |
| Scandinavian Tobacco |
| ADHI KARYA |
Scandinavian Tobacco and ADHI KARYA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and ADHI KARYA
The main advantage of trading using opposite Scandinavian Tobacco and ADHI KARYA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, ADHI KARYA 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 ADHI KARYA will offset losses from the drop in ADHI KARYA's long position.| Scandinavian Tobacco vs. Compugroup Medical SE | Scandinavian Tobacco vs. SAFETY MEDICAL PROD | Scandinavian Tobacco vs. IMAGIN MEDICAL INC | Scandinavian Tobacco vs. TYSON FOODS A |
| ADHI KARYA vs. PACIFIC ONLINE | ADHI KARYA vs. INTERSHOP Communications Aktiengesellschaft | ADHI KARYA vs. CarsalesCom | ADHI KARYA vs. GungHo Online Entertainment |
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.
Other Complementary Tools
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |