Correlation Between Brockhaus Capital and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Brockhaus Capital 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 Brockhaus Capital and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Brockhaus Capital Management and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Brockhaus Capital 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 Brockhaus Capital with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Brockhaus Capital and Scandinavian Tobacco.
Diversification Opportunities for Brockhaus Capital and Scandinavian Tobacco
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Brockhaus and Scandinavian is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding Brockhaus Capital Management and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Brockhaus Capital 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 Brockhaus Capital Management 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 Brockhaus Capital i.e., Brockhaus Capital and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Brockhaus Capital and Scandinavian Tobacco
Assuming the 90 days trading horizon Brockhaus Capital Management is expected to generate 1.53 times more return on investment than Scandinavian Tobacco. However, Brockhaus Capital is 1.53 times more volatile than Scandinavian Tobacco Group. It trades about 0.0 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about -0.1 per unit of risk. If you would invest 2,360 in Brockhaus Capital Management on September 20, 2024 and sell it today you would lose (10.00) from holding Brockhaus Capital Management or give up 0.42% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Brockhaus Capital Management vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Brockhaus Capital |
| Scandinavian Tobacco |
Brockhaus Capital and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Brockhaus Capital and Scandinavian Tobacco
The main advantage of trading using opposite Brockhaus Capital and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Brockhaus Capital 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.| Brockhaus Capital vs. Warner Music Group | Brockhaus Capital vs. OURGAME INTHOLDL 00005 | Brockhaus Capital vs. Boyd Gaming | Brockhaus Capital vs. Dave Busters Entertainment |
| Scandinavian Tobacco vs. Regions Financial | Scandinavian Tobacco vs. PT Bank Maybank | Scandinavian Tobacco vs. CHIBA BANK | Scandinavian Tobacco vs. Tradegate AG Wertpapierhandelsbank |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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