Correlation Between Ecclesiastical Insurance and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Ecclesiastical Insurance 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 Ecclesiastical Insurance and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Ecclesiastical Insurance Office and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Ecclesiastical Insurance 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 Ecclesiastical Insurance with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Ecclesiastical Insurance and Scandinavian Tobacco.
Diversification Opportunities for Ecclesiastical Insurance and Scandinavian Tobacco
0.33 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Ecclesiastical and Scandinavian is 0.33. Overlapping area represents the amount of risk that can be diversified away by holding Ecclesiastical Insurance Offic and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Ecclesiastical Insurance 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 Ecclesiastical Insurance Office 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 Ecclesiastical Insurance i.e., Ecclesiastical Insurance and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Ecclesiastical Insurance and Scandinavian Tobacco
Assuming the 90 days trading horizon Ecclesiastical Insurance Office is expected to generate 0.65 times more return on investment than Scandinavian Tobacco. However, Ecclesiastical Insurance Office is 1.54 times less risky than Scandinavian Tobacco. It trades about -0.02 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about -0.16 per unit of risk. If you would invest 13,164 in Ecclesiastical Insurance Office on September 12, 2024 and sell it today you would lose (114.00) from holding Ecclesiastical Insurance Office or give up 0.87% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Ecclesiastical Insurance Offic vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Ecclesiastical Insurance |
| Scandinavian Tobacco |
Ecclesiastical Insurance and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Ecclesiastical Insurance and Scandinavian Tobacco
The main advantage of trading using opposite Ecclesiastical Insurance and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Ecclesiastical Insurance 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.| Ecclesiastical Insurance vs. Samsung Electronics Co | Ecclesiastical Insurance vs. Samsung Electronics Co | Ecclesiastical Insurance vs. Hyundai Motor | Ecclesiastical Insurance vs. Toyota Motor Corp |
| Scandinavian Tobacco vs. Hong Kong Land | Scandinavian Tobacco vs. Neometals | Scandinavian Tobacco vs. Coor Service Management | Scandinavian Tobacco vs. Fidelity Sustainable USD |
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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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