Correlation Between Science In and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Science In 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 Science In and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Science in Sport and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Science In 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 Science In with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Science In and Scandinavian Tobacco.
Diversification Opportunities for Science In and Scandinavian Tobacco
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Science and Scandinavian is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding Science in Sport and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Science In 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 Science in Sport 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 Science In i.e., Science In and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Science In and Scandinavian Tobacco
Assuming the 90 days trading horizon Science In is expected to generate 32.16 times less return on investment than Scandinavian Tobacco. In addition to that, Science In is 1.63 times more volatile than Scandinavian Tobacco Group. It trades about 0.01 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.37 per unit of volatility. If you would invest 9,365 in Scandinavian Tobacco Group on October 25, 2024 and sell it today you would earn a total of 600.00 from holding Scandinavian Tobacco Group or generate 6.41% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Science in Sport vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Science in Sport |
| Scandinavian Tobacco |
Science In and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Science In and Scandinavian Tobacco
The main advantage of trading using opposite Science In and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Science In 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.| Science In vs. Morgan Advanced Materials | Science In vs. Air Products Chemicals | Science In vs. Catena Media PLC | Science In vs. Summit Materials Cl |
| Scandinavian Tobacco vs. Roper Technologies | Scandinavian Tobacco vs. Playtech Plc | Scandinavian Tobacco vs. Hilton Food Group | Scandinavian Tobacco vs. Ashtead Technology Holdings |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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