Correlation Between GLOBAL COSMED and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both GLOBAL COSMED and Scandinavian Tobacco 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 GLOBAL COSMED and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GLOBAL MED SA and Scandinavian Tobacco Group, you can compare the effects of market volatilities on GLOBAL COSMED and Scandinavian Tobacco 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 GLOBAL COSMED with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of GLOBAL COSMED and Scandinavian Tobacco.
Diversification Opportunities for GLOBAL COSMED and Scandinavian Tobacco
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between GLOBAL and Scandinavian is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding GLOBAL MED SA and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and GLOBAL COSMED 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 GLOBAL MED SA are associated (or correlated) with Scandinavian Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Tobacco has no effect on the direction of GLOBAL COSMED i.e., GLOBAL COSMED and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between GLOBAL COSMED and Scandinavian Tobacco
Assuming the 90 days horizon GLOBAL MED SA is expected to generate 2.09 times more return on investment than Scandinavian Tobacco. However, GLOBAL COSMED is 2.09 times more volatile than Scandinavian Tobacco Group. It trades about 0.29 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.25 per unit of risk. If you would invest 109.00 in GLOBAL MED SA on October 23, 2024 and sell it today you would earn a total of 15.00 from holding GLOBAL MED SA or generate 13.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GLOBAL MED SA vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| GLOBAL MED SA |
| Scandinavian Tobacco |
GLOBAL COSMED and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GLOBAL COSMED and Scandinavian Tobacco
The main advantage of trading using opposite GLOBAL COSMED and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GLOBAL COSMED position performs unexpectedly, Scandinavian Tobacco 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 Scandinavian Tobacco will offset losses from the drop in Scandinavian Tobacco's long position.| GLOBAL COSMED vs. Scandinavian Tobacco Group | GLOBAL COSMED vs. bet at home AG | GLOBAL COSMED vs. Taylor Morrison Home | GLOBAL COSMED vs. ECHO INVESTMENT ZY |
| Scandinavian Tobacco vs. Tradeweb Markets | Scandinavian Tobacco vs. United Rentals | Scandinavian Tobacco vs. TRADELINK ELECTRON | Scandinavian Tobacco vs. GRENKELEASING Dusseldorf |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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