Correlation Between Scandinavian Tobacco and CarsalesCom
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and CarsalesCom 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 CarsalesCom 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 CarsalesCom, you can compare the effects of market volatilities on Scandinavian Tobacco and CarsalesCom 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 CarsalesCom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and CarsalesCom.
Diversification Opportunities for Scandinavian Tobacco and CarsalesCom
-0.83 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Scandinavian and CarsalesCom is -0.83. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and CarsalesCom in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CarsalesCom 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 CarsalesCom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CarsalesCom has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and CarsalesCom go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and CarsalesCom
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to generate 3.53 times more return on investment than CarsalesCom. However, Scandinavian Tobacco is 3.53 times more volatile than CarsalesCom. It trades about 0.06 of its potential returns per unit of risk. CarsalesCom is currently generating about 0.1 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 | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. CarsalesCom
Performance |
| Timeline |
| Scandinavian Tobacco |
| CarsalesCom |
Scandinavian Tobacco and CarsalesCom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and CarsalesCom
The main advantage of trading using opposite Scandinavian Tobacco and CarsalesCom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, CarsalesCom 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 CarsalesCom will offset losses from the drop in CarsalesCom'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 |
| CarsalesCom vs. Tencent Holdings | CarsalesCom vs. Superior Plus Corp | CarsalesCom vs. SIVERS SEMICONDUCTORS AB | CarsalesCom vs. NorAm Drilling AS |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
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