Correlation Between BAIYU Holdings and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both BAIYU Holdings 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 BAIYU Holdings and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between BAIYU Holdings and Scandinavian Tobacco Group, you can compare the effects of market volatilities on BAIYU Holdings 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 BAIYU Holdings with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of BAIYU Holdings and Scandinavian Tobacco.
Diversification Opportunities for BAIYU Holdings and Scandinavian Tobacco
0.15 | Correlation Coefficient |
Average diversification
The 3 months correlation between BAIYU and Scandinavian is 0.15. Overlapping area represents the amount of risk that can be diversified away by holding BAIYU Holdings and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and BAIYU Holdings 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 BAIYU Holdings 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 BAIYU Holdings i.e., BAIYU Holdings and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between BAIYU Holdings and Scandinavian Tobacco
Considering the 90-day investment horizon BAIYU Holdings is expected to under-perform the Scandinavian Tobacco. In addition to that, BAIYU Holdings is 5.27 times more volatile than Scandinavian Tobacco Group. It trades about -0.08 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 13, 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 | 97.17% |
| Values | Daily Returns |
BAIYU Holdings vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| BAIYU Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Scandinavian Tobacco |
BAIYU Holdings and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with BAIYU Holdings and Scandinavian Tobacco
The main advantage of trading using opposite BAIYU Holdings and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if BAIYU Holdings 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.| BAIYU Holdings vs. Cleantech Power Corp | BAIYU Holdings vs. Lululemon Athletica | BAIYU Holdings vs. Northstar Clean Technologies | BAIYU Holdings vs. Cedar Realty Trust |
| 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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