Correlation Between Scandinavian Tobacco and SEI INVESTMENTS
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and SEI INVESTMENTS 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 SEI INVESTMENTS 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 SEI INVESTMENTS, you can compare the effects of market volatilities on Scandinavian Tobacco and SEI INVESTMENTS 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 SEI INVESTMENTS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and SEI INVESTMENTS.
Diversification Opportunities for Scandinavian Tobacco and SEI INVESTMENTS
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Scandinavian and SEI is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and SEI INVESTMENTS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SEI INVESTMENTS 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 SEI INVESTMENTS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SEI INVESTMENTS has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and SEI INVESTMENTS go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and SEI INVESTMENTS
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to under-perform the SEI INVESTMENTS. In addition to that, Scandinavian Tobacco is 1.31 times more volatile than SEI INVESTMENTS. It trades about -0.08 of its total potential returns per unit of risk. SEI INVESTMENTS is currently generating about 0.32 per unit of volatility. If you would invest 6,450 in SEI INVESTMENTS on September 12, 2024 and sell it today you would earn a total of 1,450 from holding SEI INVESTMENTS or generate 22.48% 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. SEI INVESTMENTS
Performance |
| Timeline |
| Scandinavian Tobacco |
| SEI INVESTMENTS |
Scandinavian Tobacco and SEI INVESTMENTS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and SEI INVESTMENTS
The main advantage of trading using opposite Scandinavian Tobacco and SEI INVESTMENTS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, SEI INVESTMENTS 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 SEI INVESTMENTS will offset losses from the drop in SEI INVESTMENTS's long position.| Scandinavian Tobacco vs. Daido Steel Co | Scandinavian Tobacco vs. OFFICE DEPOT | Scandinavian Tobacco vs. MAVEN WIRELESS SWEDEN | Scandinavian Tobacco vs. MITSUBISHI STEEL MFG |
| SEI INVESTMENTS vs. BROADSTNET LEADL 00025 | SEI INVESTMENTS vs. Texas Roadhouse | SEI INVESTMENTS vs. OFFICE DEPOT | SEI INVESTMENTS vs. Broadcom |
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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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