Correlation Between ALERION CLEANPOWER and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both ALERION CLEANPOWER 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 ALERION CLEANPOWER and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ALERION CLEANPOWER and Scandinavian Tobacco Group, you can compare the effects of market volatilities on ALERION CLEANPOWER 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 ALERION CLEANPOWER with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of ALERION CLEANPOWER and Scandinavian Tobacco.
Diversification Opportunities for ALERION CLEANPOWER and Scandinavian Tobacco
-0.64 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ALERION and Scandinavian is -0.64. Overlapping area represents the amount of risk that can be diversified away by holding ALERION CLEANPOWER and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and ALERION CLEANPOWER 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 ALERION CLEANPOWER 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 ALERION CLEANPOWER i.e., ALERION CLEANPOWER and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between ALERION CLEANPOWER and Scandinavian Tobacco
Assuming the 90 days trading horizon ALERION CLEANPOWER is expected to under-perform the Scandinavian Tobacco. In addition to that, ALERION CLEANPOWER is 1.19 times more volatile than Scandinavian Tobacco Group. It trades about -0.01 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.25 per unit of volatility. If you would invest 1,242 in Scandinavian Tobacco Group on October 23, 2024 and sell it today you would earn a total of 76.00 from holding Scandinavian Tobacco Group or generate 6.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 94.12% |
| Values | Daily Returns |
ALERION CLEANPOWER vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| ALERION CLEANPOWER |
| Scandinavian Tobacco |
ALERION CLEANPOWER and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ALERION CLEANPOWER and Scandinavian Tobacco
The main advantage of trading using opposite ALERION CLEANPOWER and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ALERION CLEANPOWER 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.| ALERION CLEANPOWER vs. Encavis AG | ALERION CLEANPOWER vs. CenterPoint Energy | ALERION CLEANPOWER vs. Gossan Resources | ALERION CLEANPOWER vs. CALTAGIRONE EDITORE |
| Scandinavian Tobacco vs. Tradeweb Markets | Scandinavian Tobacco vs. United Rentals | Scandinavian Tobacco vs. TRADELINK ELECTRON | Scandinavian Tobacco vs. GRENKELEASING Dusseldorf |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
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