Correlation Between Osaka Steel and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Osaka Steel 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 Osaka Steel and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Osaka Steel Co, and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Osaka Steel 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 Osaka Steel with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Osaka Steel and Scandinavian Tobacco.
Diversification Opportunities for Osaka Steel and Scandinavian Tobacco
-0.05 | Correlation Coefficient |
Good diversification
The 3 months correlation between Osaka and Scandinavian is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Osaka Steel Co, and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Osaka Steel 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 Osaka Steel Co, 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 Osaka Steel i.e., Osaka Steel and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Osaka Steel and Scandinavian Tobacco
If you would invest 1,020 in Osaka Steel Co, on September 13, 2024 and sell it today you would earn a total of 0.00 from holding Osaka Steel Co, or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Osaka Steel Co, vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Osaka Steel Co, |
| Scandinavian Tobacco |
Osaka Steel and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Osaka Steel and Scandinavian Tobacco
The main advantage of trading using opposite Osaka Steel and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Osaka Steel 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.| Osaka Steel vs. Copa Holdings SA | Osaka Steel vs. United Airlines Holdings | Osaka Steel vs. Delta Air Lines | Osaka Steel vs. SkyWest |
| Scandinavian Tobacco vs. Universal | Scandinavian Tobacco vs. Imperial Brands PLC | Scandinavian Tobacco vs. Japan Tobacco ADR | Scandinavian Tobacco vs. Philip Morris International |
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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