Correlation Between Dataproces Group and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Dataproces Group 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 Dataproces Group and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dataproces Group AS and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Dataproces Group 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 Dataproces Group with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dataproces Group and Scandinavian Tobacco.
Diversification Opportunities for Dataproces Group and Scandinavian Tobacco
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Dataproces and Scandinavian is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Dataproces Group AS and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Dataproces Group 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 Dataproces Group AS 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 Dataproces Group i.e., Dataproces Group and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Dataproces Group and Scandinavian Tobacco
Assuming the 90 days trading horizon Dataproces Group is expected to generate 1.66 times less return on investment than Scandinavian Tobacco. In addition to that, Dataproces Group is 2.57 times more volatile than Scandinavian Tobacco Group. It trades about 0.1 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.43 per unit of volatility. If you would invest 10,220 in Scandinavian Tobacco Group on November 27, 2024 and sell it today you would earn a total of 640.00 from holding Scandinavian Tobacco Group or generate 6.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Dataproces Group AS vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Dataproces Group |
| Scandinavian Tobacco |
Dataproces Group and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dataproces Group and Scandinavian Tobacco
The main advantage of trading using opposite Dataproces Group and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dataproces Group 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.| Dataproces Group vs. Penneo AS | Dataproces Group vs. Bactiquant AS | Dataproces Group vs. cBrain AS | Dataproces Group vs. FOM Technologies AS |
| Scandinavian Tobacco vs. Matas AS | Scandinavian Tobacco vs. Tryg AS | Scandinavian Tobacco vs. Alm Brand | Scandinavian Tobacco vs. Royal Unibrew AS |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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