Correlation Between AP Mller and Scandinavian Tobacco
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By analyzing existing cross correlation between AP Mller and Scandinavian Tobacco Group, you can compare the effects of market volatilities on AP Mller 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 AP Mller with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of AP Mller and Scandinavian Tobacco.
Diversification Opportunities for AP Mller and Scandinavian Tobacco
-0.77 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between MAERSK-A and Scandinavian is -0.77. Overlapping area represents the amount of risk that can be diversified away by holding AP Mller and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and AP Mller 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 AP Mller 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 AP Mller i.e., AP Mller and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between AP Mller and Scandinavian Tobacco
Assuming the 90 days trading horizon AP Mller is expected to generate 1.78 times more return on investment than Scandinavian Tobacco. However, AP Mller is 1.78 times more volatile than Scandinavian Tobacco Group. It trades about 0.01 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.01 per unit of risk. If you would invest 1,171,000 in AP Mller on August 25, 2024 and sell it today you would lose (17,000) from holding AP Mller or give up 1.45% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
AP Mller vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| AP Mller |
| Scandinavian Tobacco |
AP Mller and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with AP Mller and Scandinavian Tobacco
The main advantage of trading using opposite AP Mller and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if AP Mller 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.| AP Mller vs. AP Mller | AP Mller vs. DSV Panalpina AS | AP Mller vs. Danske Bank AS | AP Mller vs. FLSmidth Co |
| Scandinavian Tobacco vs. Matas AS | Scandinavian Tobacco vs. Tryg AS | Scandinavian Tobacco vs. Alm Brand | Scandinavian Tobacco vs. Royal Unibrew AS |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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