Correlation Between Pets At and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Pets At 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 Pets At and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Pets at Home and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Pets At 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 Pets At with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Pets At and Scandinavian Tobacco.
Diversification Opportunities for Pets At and Scandinavian Tobacco
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Pets and Scandinavian is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Pets at Home and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Pets At 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 Pets at Home 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 Pets At i.e., Pets At and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Pets At and Scandinavian Tobacco
Assuming the 90 days trading horizon Pets at Home is expected to under-perform the Scandinavian Tobacco. In addition to that, Pets At is 1.56 times more volatile than Scandinavian Tobacco Group. It trades about -0.04 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.01 per unit of volatility. If you would invest 10,800 in Scandinavian Tobacco Group on December 7, 2024 and sell it today you would earn a total of 180.00 from holding Scandinavian Tobacco Group or generate 1.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.5% |
| Values | Daily Returns |
Pets at Home vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Pets at Home |
| Scandinavian Tobacco |
Pets At and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Pets At and Scandinavian Tobacco
The main advantage of trading using opposite Pets At and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Pets At 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.| Pets At vs. Ecclesiastical Insurance Office | Pets At vs. Vienna Insurance Group | Pets At vs. Ashtead Technology Holdings | Pets At vs. Light Science Technologies |
| Scandinavian Tobacco vs. DFS Furniture PLC | Scandinavian Tobacco vs. Atalaya Mining | Scandinavian Tobacco vs. Lundin Mining Corp | Scandinavian Tobacco vs. Silvercorp Metals |
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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