Correlation Between Platinum Investment and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Platinum Investment 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 Platinum Investment and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Platinum Investment Management and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Platinum Investment 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 Platinum Investment with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Platinum Investment and Scandinavian Tobacco.
Diversification Opportunities for Platinum Investment and Scandinavian Tobacco
0.47 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Platinum and Scandinavian is 0.47. Overlapping area represents the amount of risk that can be diversified away by holding Platinum Investment Management and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Platinum Investment 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 Platinum Investment Management 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 Platinum Investment i.e., Platinum Investment and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Platinum Investment and Scandinavian Tobacco
Assuming the 90 days horizon Platinum Investment is expected to generate 2.41 times less return on investment than Scandinavian Tobacco. In addition to that, Platinum Investment is 2.87 times more volatile than Scandinavian Tobacco Group. It trades about 0.05 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.35 per unit of volatility. If you would invest 1,316 in Scandinavian Tobacco Group on November 27, 2024 and sell it today you would earn a total of 104.00 from holding Scandinavian Tobacco Group or generate 7.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Platinum Investment Management vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Platinum Investment |
| Scandinavian Tobacco |
Platinum Investment and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Platinum Investment and Scandinavian Tobacco
The main advantage of trading using opposite Platinum Investment and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Platinum Investment 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.| Platinum Investment vs. TITAN MACHINERY | Platinum Investment vs. Endeavour Mining PLC | Platinum Investment vs. GALENA MINING LTD | Platinum Investment vs. Tokyu Construction Co |
| Scandinavian Tobacco vs. DATANG INTL POW | Scandinavian Tobacco vs. Information Services International Dentsu | Scandinavian Tobacco vs. Alibaba Health Information | Scandinavian Tobacco vs. GEAR4MUSIC LS 10 |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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