Correlation Between Sphere Entertainment and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Sphere Entertainment 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 Sphere Entertainment and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Sphere Entertainment Co and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Sphere Entertainment 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 Sphere Entertainment with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Sphere Entertainment and Scandinavian Tobacco.
Diversification Opportunities for Sphere Entertainment and Scandinavian Tobacco
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Sphere and Scandinavian is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Sphere Entertainment Co and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Sphere Entertainment 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 Sphere Entertainment Co 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 Sphere Entertainment i.e., Sphere Entertainment and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Sphere Entertainment and Scandinavian Tobacco
If you would invest 716.00 in Scandinavian Tobacco Group on September 19, 2024 and sell it today you would earn a total of 0.00 from holding Scandinavian Tobacco Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
Sphere Entertainment Co vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Sphere Entertainment |
| Scandinavian Tobacco |
Sphere Entertainment and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Sphere Entertainment and Scandinavian Tobacco
The main advantage of trading using opposite Sphere Entertainment and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Sphere Entertainment 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.| Sphere Entertainment vs. Liberty Media | Sphere Entertainment vs. News Corp B | Sphere Entertainment vs. News Corp A |
| Scandinavian Tobacco vs. Imperial Brands PLC | Scandinavian Tobacco vs. RLX Technology | Scandinavian Tobacco vs. British American Tobacco | Scandinavian Tobacco vs. Turning Point Brands |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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