Correlation Between Scandinavian Tobacco and Gannett
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Gannett 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 Scandinavian Tobacco and Gannett into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandinavian Tobacco Group and Gannett Co, you can compare the effects of market volatilities on Scandinavian Tobacco and Gannett 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 Scandinavian Tobacco with a short position of Gannett. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Gannett.
Diversification Opportunities for Scandinavian Tobacco and Gannett
-0.34 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scandinavian and Gannett is -0.34. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Gannett Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gannett and Scandinavian Tobacco 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 Scandinavian Tobacco Group are associated (or correlated) with Gannett. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gannett has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Gannett go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Gannett
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to generate 0.75 times more return on investment than Gannett. However, Scandinavian Tobacco Group is 1.33 times less risky than Gannett. It trades about 0.28 of its potential returns per unit of risk. Gannett Co is currently generating about -0.2 per unit of risk. If you would invest 1,345 in Scandinavian Tobacco Group on November 9, 2024 and sell it today you would earn a total of 135.00 from holding Scandinavian Tobacco Group or generate 10.04% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. Gannett Co
Performance |
| Timeline |
| Scandinavian Tobacco |
| Gannett |
Scandinavian Tobacco and Gannett Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Gannett
The main advantage of trading using opposite Scandinavian Tobacco and Gannett positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Gannett 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 Gannett will offset losses from the drop in Gannett's long position.| Scandinavian Tobacco vs. Pyxus International | Scandinavian Tobacco vs. Japan Tobacco ADR | Scandinavian Tobacco vs. Greenlane Holdings |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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