Correlation Between Scandinavian Tobacco and BCE
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and BCE 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 BCE 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 BCE Inc, you can compare the effects of market volatilities on Scandinavian Tobacco and BCE 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 BCE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and BCE.
Diversification Opportunities for Scandinavian Tobacco and BCE
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Scandinavian and BCE is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and BCE Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BCE Inc 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 BCE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BCE Inc has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and BCE go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and BCE
If you would invest 716.00 in Scandinavian Tobacco Group on September 20, 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 |
Scandinavian Tobacco Group vs. BCE Inc
Performance |
| Timeline |
| Scandinavian Tobacco |
| BCE Inc |
Scandinavian Tobacco and BCE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and BCE
The main advantage of trading using opposite Scandinavian Tobacco and BCE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, BCE 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 BCE will offset losses from the drop in BCE's long position.| 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 Global Correlations module to find global opportunities by holding instruments from different markets.
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