Correlation Between Scandinavian Tobacco and Perseus Mining
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Perseus Mining 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 Perseus Mining 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 Perseus Mining Limited, you can compare the effects of market volatilities on Scandinavian Tobacco and Perseus Mining 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 Perseus Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Perseus Mining.
Diversification Opportunities for Scandinavian Tobacco and Perseus Mining
-0.01 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scandinavian and Perseus is -0.01. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Perseus Mining Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Perseus Mining 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 Perseus Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Perseus Mining has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Perseus Mining go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Perseus Mining
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to generate 1.89 times more return on investment than Perseus Mining. However, Scandinavian Tobacco is 1.89 times more volatile than Perseus Mining Limited. It trades about 0.06 of its potential returns per unit of risk. Perseus Mining Limited is currently generating about 0.03 per unit of risk. If you would invest 442.00 in Scandinavian Tobacco Group on September 13, 2024 and sell it today you would earn a total of 828.00 from holding Scandinavian Tobacco Group or generate 187.33% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. Perseus Mining Limited
Performance |
| Timeline |
| Scandinavian Tobacco |
| Perseus Mining |
Scandinavian Tobacco and Perseus Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Perseus Mining
The main advantage of trading using opposite Scandinavian Tobacco and Perseus Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Perseus Mining 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 Perseus Mining will offset losses from the drop in Perseus Mining's long position.| Scandinavian Tobacco vs. HomeToGo SE | Scandinavian Tobacco vs. Gruppo Mutuionline SpA | Scandinavian Tobacco vs. SIEM OFFSHORE NEW | Scandinavian Tobacco vs. Taylor Morrison Home |
| Perseus Mining vs. Boyd Gaming | Perseus Mining vs. CI GAMES SA | Perseus Mining vs. GameStop Corp | Perseus Mining vs. ULTRA CLEAN HLDGS |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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