Correlation Between Endeavour Mining and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Endeavour Mining 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 Endeavour Mining and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Endeavour Mining Corp and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Endeavour Mining 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 Endeavour Mining with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Scandinavian Tobacco.
Diversification Opportunities for Endeavour Mining and Scandinavian Tobacco
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Endeavour and Scandinavian is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining 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 Endeavour Mining 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 Endeavour Mining 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 Endeavour Mining i.e., Endeavour Mining and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Endeavour Mining and Scandinavian Tobacco
Assuming the 90 days trading horizon Endeavour Mining Corp is expected to under-perform the Scandinavian Tobacco. In addition to that, Endeavour Mining is 2.48 times more volatile than Scandinavian Tobacco Group. It trades about -0.06 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.05 per unit of volatility. If you would invest 9,624 in Scandinavian Tobacco Group on October 10, 2024 and sell it today you would earn a total of 76.00 from holding Scandinavian Tobacco Group or generate 0.79% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Endeavour Mining Corp vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Endeavour Mining Corp |
| Scandinavian Tobacco |
Endeavour Mining and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and Scandinavian Tobacco
The main advantage of trading using opposite Endeavour Mining and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour Mining 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.| Endeavour Mining vs. Ross Stores | Endeavour Mining vs. Silver Bullet Data | Endeavour Mining vs. Qurate Retail Series | Endeavour Mining vs. Costco Wholesale Corp |
| Scandinavian Tobacco vs. Oxford Technology 2 | Scandinavian Tobacco vs. Games Workshop Group | Scandinavian Tobacco vs. Gamma Communications PLC | Scandinavian Tobacco vs. Hochschild Mining plc |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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