Correlation Between Boston Omaha and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Boston Omaha 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 Boston Omaha and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Boston Omaha Corp and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Boston Omaha 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 Boston Omaha with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Boston Omaha and Scandinavian Tobacco.
Diversification Opportunities for Boston Omaha and Scandinavian Tobacco
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Boston and Scandinavian is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Boston Omaha Corp and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Boston Omaha 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 Boston Omaha Corp 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 Boston Omaha i.e., Boston Omaha and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Boston Omaha and Scandinavian Tobacco
Considering the 90-day investment horizon Boston Omaha Corp is expected to under-perform the Scandinavian Tobacco. In addition to that, Boston Omaha is 1.17 times more volatile than Scandinavian Tobacco Group. It trades about -0.05 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.03 per unit of volatility. If you would invest 608.00 in Scandinavian Tobacco Group on September 2, 2024 and sell it today you would earn a total of 108.00 from holding Scandinavian Tobacco Group or generate 17.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Boston Omaha Corp vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Boston Omaha Corp |
| Scandinavian Tobacco |
Boston Omaha and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Boston Omaha and Scandinavian Tobacco
The main advantage of trading using opposite Boston Omaha and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Boston Omaha 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.| Boston Omaha vs. Integral Ad Science | Boston Omaha vs. Cardlytics | Boston Omaha vs. Cimpress NV | Boston Omaha vs. QuinStreet |
| Scandinavian Tobacco vs. Universal | Scandinavian Tobacco vs. Imperial Brands PLC | Scandinavian Tobacco vs. Japan Tobacco ADR | Scandinavian Tobacco vs. Philip Morris International |
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 Portfolio Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
Other Complementary Tools
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges | |
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Fundamental Analysis View fundamental data based on most recent published financial statements |