Correlation Between PARKEN Sport and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both PARKEN Sport 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 PARKEN Sport and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PARKEN Sport Entertainment and Scandinavian Tobacco Group, you can compare the effects of market volatilities on PARKEN Sport 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 PARKEN Sport with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of PARKEN Sport and Scandinavian Tobacco.
Diversification Opportunities for PARKEN Sport and Scandinavian Tobacco
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between PARKEN and Scandinavian is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding PARKEN Sport Entertainment and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and PARKEN Sport 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 PARKEN Sport Entertainment 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 PARKEN Sport i.e., PARKEN Sport and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between PARKEN Sport and Scandinavian Tobacco
Assuming the 90 days trading horizon PARKEN Sport Entertainment is expected to generate 1.21 times more return on investment than Scandinavian Tobacco. However, PARKEN Sport is 1.21 times more volatile than Scandinavian Tobacco Group. It trades about -0.02 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about -0.06 per unit of risk. If you would invest 13,600 in PARKEN Sport Entertainment on August 29, 2024 and sell it today you would lose (1,550) from holding PARKEN Sport Entertainment or give up 11.4% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PARKEN Sport Entertainment vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| PARKEN Sport Enterta |
| Scandinavian Tobacco |
PARKEN Sport and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PARKEN Sport and Scandinavian Tobacco
The main advantage of trading using opposite PARKEN Sport and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PARKEN Sport 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.| PARKEN Sport vs. Broendbyernes IF Fodbold | PARKEN Sport vs. Bang Olufsen | PARKEN Sport vs. Matas AS | PARKEN Sport vs. NKT AS |
| 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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Headlines Timeline Stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine |