Correlation Between Dupont De and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Dupont De 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 Dupont De and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dupont De Nemours and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Dupont De 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 Dupont De with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dupont De and Scandinavian Tobacco.
Diversification Opportunities for Dupont De and Scandinavian Tobacco
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between Dupont and Scandinavian is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding Dupont De Nemours and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Dupont De 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 Dupont De Nemours 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 Dupont De i.e., Dupont De and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Dupont De and Scandinavian Tobacco
Allowing for the 90-day total investment horizon Dupont De Nemours is expected to generate 1.08 times more return on investment than Scandinavian Tobacco. However, Dupont De is 1.08 times more volatile than Scandinavian Tobacco Group. It trades about 0.05 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about -0.05 per unit of risk. If you would invest 7,040 in Dupont De Nemours on August 25, 2024 and sell it today you would earn a total of 1,292 from holding Dupont De Nemours or generate 18.35% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Dupont De Nemours vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Dupont De Nemours |
| Scandinavian Tobacco |
Dupont De and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dupont De and Scandinavian Tobacco
The main advantage of trading using opposite Dupont De and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dupont De 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.| Dupont De vs. Olin Corporation | Dupont De vs. Cabot | Dupont De vs. Kronos Worldwide | Dupont De vs. LyondellBasell Industries NV |
| 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years |