Correlation Between Eastinco Mining and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining 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 Eastinco Mining and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastinco Mining Exploration and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Eastinco Mining 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 Eastinco Mining with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Scandinavian Tobacco.
Diversification Opportunities for Eastinco Mining and Scandinavian Tobacco
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Eastinco and Scandinavian is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Eastinco Mining 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 Eastinco Mining Exploration 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 Eastinco Mining i.e., Eastinco Mining and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Eastinco Mining and Scandinavian Tobacco
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to generate 3.3 times more return on investment than Scandinavian Tobacco. However, Eastinco Mining is 3.3 times more volatile than Scandinavian Tobacco Group. It trades about 0.15 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.23 per unit of risk. If you would invest 4,950 in Eastinco Mining Exploration on October 17, 2024 and sell it today you would earn a total of 450.00 from holding Eastinco Mining Exploration or generate 9.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastinco Mining Exploration vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Eastinco Mining Expl |
| Scandinavian Tobacco |
Eastinco Mining and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and Scandinavian Tobacco
The main advantage of trading using opposite Eastinco Mining and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining 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.| Eastinco Mining vs. Polar Capital Technology | Eastinco Mining vs. Micron Technology | Eastinco Mining vs. Geely Automobile Holdings | Eastinco Mining vs. Technicolor |
| Scandinavian Tobacco vs. Eastinco Mining Exploration | Scandinavian Tobacco vs. Summit Materials Cl | Scandinavian Tobacco vs. Jacquet Metal Service | Scandinavian Tobacco vs. Metals Exploration Plc |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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