Correlation Between Lava Medtech and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Lava Medtech 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 Lava Medtech and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lava Medtech Acquisition and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Lava Medtech 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 Lava Medtech with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lava Medtech and Scandinavian Tobacco.
Diversification Opportunities for Lava Medtech and Scandinavian Tobacco
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Lava and Scandinavian is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Lava Medtech Acquisition and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Lava Medtech 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 Lava Medtech Acquisition 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 Lava Medtech i.e., Lava Medtech and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Lava Medtech and Scandinavian Tobacco
If you would invest 664.00 in Scandinavian Tobacco Group on September 12, 2024 and sell it today you would earn a total of 52.00 from holding Scandinavian Tobacco Group or generate 7.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 0.28% |
| Values | Daily Returns |
Lava Medtech Acquisition vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Lava Medtech Acquisition |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
| Scandinavian Tobacco |
Lava Medtech and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lava Medtech and Scandinavian Tobacco
The main advantage of trading using opposite Lava Medtech and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lava Medtech 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.| Lava Medtech vs. Scandinavian Tobacco Group | Lava Medtech vs. Afya | Lava Medtech vs. Anheuser Busch Inbev | Lava Medtech vs. Zane Interactive Publishing |
| Scandinavian Tobacco vs. Imperial Brands PLC | Scandinavian Tobacco vs. RLX Technology | Scandinavian Tobacco vs. British American Tobacco | Scandinavian Tobacco vs. Turning Point Brands |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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