Correlation Between Scandinavian Tobacco and Gruppo Mutuionline
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Gruppo Mutuionline 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 Gruppo Mutuionline 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 Gruppo Mutuionline SpA, you can compare the effects of market volatilities on Scandinavian Tobacco and Gruppo Mutuionline 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 Gruppo Mutuionline. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Gruppo Mutuionline.
Diversification Opportunities for Scandinavian Tobacco and Gruppo Mutuionline
-0.51 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scandinavian and Gruppo is -0.51. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Gruppo Mutuionline SpA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gruppo Mutuionline SpA 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 Gruppo Mutuionline. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gruppo Mutuionline SpA has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Gruppo Mutuionline go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Gruppo Mutuionline
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to generate 0.85 times more return on investment than Gruppo Mutuionline. However, Scandinavian Tobacco Group is 1.18 times less risky than Gruppo Mutuionline. It trades about 0.24 of its potential returns per unit of risk. Gruppo Mutuionline SpA is currently generating about 0.06 per unit of risk. If you would invest 1,292 in Scandinavian Tobacco Group on November 7, 2024 and sell it today you would earn a total of 76.00 from holding Scandinavian Tobacco Group or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 91.3% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. Gruppo Mutuionline SpA
Performance |
| Timeline |
| Scandinavian Tobacco |
| Gruppo Mutuionline SpA |
Scandinavian Tobacco and Gruppo Mutuionline Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Gruppo Mutuionline
The main advantage of trading using opposite Scandinavian Tobacco and Gruppo Mutuionline positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Gruppo Mutuionline 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 Gruppo Mutuionline will offset losses from the drop in Gruppo Mutuionline's long position.| Scandinavian Tobacco vs. Extra Space Storage | Scandinavian Tobacco vs. PREMIER FOODS | Scandinavian Tobacco vs. Suntory Beverage Food | Scandinavian Tobacco vs. INFORMATION SVC GRP |
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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 Stocks Directory module to find actively traded stocks across global markets.
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