Correlation Between VIAPLAY GROUP and IMPERIAL TOBACCO
Can any of the company-specific risk be diversified away by investing in both VIAPLAY GROUP and IMPERIAL 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 VIAPLAY GROUP and IMPERIAL TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VIAPLAY GROUP AB and IMPERIAL TOBACCO , you can compare the effects of market volatilities on VIAPLAY GROUP and IMPERIAL 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 VIAPLAY GROUP with a short position of IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of VIAPLAY GROUP and IMPERIAL TOBACCO.
Diversification Opportunities for VIAPLAY GROUP and IMPERIAL TOBACCO
-0.63 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between VIAPLAY and IMPERIAL is -0.63. Overlapping area represents the amount of risk that can be diversified away by holding VIAPLAY GROUP AB and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO and VIAPLAY GROUP 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 VIAPLAY GROUP AB are associated (or correlated) with IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of VIAPLAY GROUP i.e., VIAPLAY GROUP and IMPERIAL TOBACCO go up and down completely randomly.
Pair Corralation between VIAPLAY GROUP and IMPERIAL TOBACCO
Assuming the 90 days horizon VIAPLAY GROUP AB is expected to under-perform the IMPERIAL TOBACCO. In addition to that, VIAPLAY GROUP is 4.71 times more volatile than IMPERIAL TOBACCO . It trades about -0.03 of its total potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.24 per unit of volatility. If you would invest 2,208 in IMPERIAL TOBACCO on September 1, 2024 and sell it today you would earn a total of 871.00 from holding IMPERIAL TOBACCO or generate 39.45% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
VIAPLAY GROUP AB vs. IMPERIAL TOBACCO
Performance |
| Timeline |
| VIAPLAY GROUP AB |
| IMPERIAL TOBACCO |
VIAPLAY GROUP and IMPERIAL TOBACCO Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VIAPLAY GROUP and IMPERIAL TOBACCO
The main advantage of trading using opposite VIAPLAY GROUP and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VIAPLAY GROUP position performs unexpectedly, IMPERIAL 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.| VIAPLAY GROUP vs. Netflix | VIAPLAY GROUP vs. Warner Music Group | VIAPLAY GROUP vs. Superior Plus Corp | VIAPLAY GROUP vs. NMI Holdings |
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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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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