Correlation Between KCR Residential and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both KCR Residential 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 KCR Residential and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between KCR Residential Reit and Scandinavian Tobacco Group, you can compare the effects of market volatilities on KCR Residential 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 KCR Residential with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of KCR Residential and Scandinavian Tobacco.
Diversification Opportunities for KCR Residential and Scandinavian Tobacco
-0.04 | Correlation Coefficient |
Good diversification
The 3 months correlation between KCR and Scandinavian is -0.04. Overlapping area represents the amount of risk that can be diversified away by holding KCR Residential Reit and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and KCR Residential 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 KCR Residential Reit 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 KCR Residential i.e., KCR Residential and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between KCR Residential and Scandinavian Tobacco
If you would invest 850.00 in KCR Residential Reit on August 30, 2024 and sell it today you would earn a total of 0.00 from holding KCR Residential Reit or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
KCR Residential Reit vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| KCR Residential Reit |
| Scandinavian Tobacco |
KCR Residential and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with KCR Residential and Scandinavian Tobacco
The main advantage of trading using opposite KCR Residential and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if KCR Residential 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.| KCR Residential vs. Beazer Homes USA | KCR Residential vs. Liontrust Asset Management | KCR Residential vs. Infrastrutture Wireless Italiane | KCR Residential vs. Elmos Semiconductor SE |
| Scandinavian Tobacco vs. Verizon Communications | Scandinavian Tobacco vs. Brunner Investment Trust | Scandinavian Tobacco vs. Gaztransport et Technigaz | Scandinavian Tobacco vs. Zegona Communications 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 Cryptocurrency Center module to build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency.
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