Correlation Between Lion One and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Lion One 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 Lion One and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Lion One Metals and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Lion One 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 Lion One with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Lion One and Scandinavian Tobacco.
Diversification Opportunities for Lion One and Scandinavian Tobacco
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Lion and Scandinavian is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Lion One Metals and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Lion One 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 Lion One Metals 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 Lion One i.e., Lion One and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Lion One and Scandinavian Tobacco
Assuming the 90 days horizon Lion One Metals is expected to under-perform the Scandinavian Tobacco. In addition to that, Lion One is 2.99 times more volatile than Scandinavian Tobacco Group. It trades about -0.07 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.0 per unit of volatility. If you would invest 1,284 in Scandinavian Tobacco Group on September 2, 2024 and sell it today you would lose (10.00) from holding Scandinavian Tobacco Group or give up 0.78% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Lion One Metals vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Lion One Metals |
| Scandinavian Tobacco |
Lion One and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Lion One and Scandinavian Tobacco
The main advantage of trading using opposite Lion One and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Lion One 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.| Lion One vs. ZIJIN MINH UNSPADR20 | Lion One vs. Superior Plus Corp | Lion One vs. NMI Holdings | Lion One vs. Origin Agritech |
| Scandinavian Tobacco vs. Compugroup Medical SE | Scandinavian Tobacco vs. SAFETY MEDICAL PROD | Scandinavian Tobacco vs. IMAGIN MEDICAL INC | Scandinavian Tobacco vs. TYSON FOODS A |
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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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