Correlation Between Scandinavian Tobacco and CopAur Minerals
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and CopAur Minerals 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 CopAur Minerals 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 CopAur Minerals, you can compare the effects of market volatilities on Scandinavian Tobacco and CopAur Minerals 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 CopAur Minerals. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and CopAur Minerals.
Diversification Opportunities for Scandinavian Tobacco and CopAur Minerals
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scandinavian and CopAur is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and CopAur Minerals in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CopAur Minerals 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 CopAur Minerals. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CopAur Minerals has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and CopAur Minerals go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and CopAur Minerals
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to generate 0.27 times more return on investment than CopAur Minerals. However, Scandinavian Tobacco Group is 3.69 times less risky than CopAur Minerals. It trades about 0.03 of its potential returns per unit of risk. CopAur Minerals is currently generating about -0.02 per unit of risk. If you would invest 608.00 in Scandinavian Tobacco Group on September 2, 2024 and sell it today you would earn a total of 108.00 from holding Scandinavian Tobacco Group or generate 17.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. CopAur Minerals
Performance |
| Timeline |
| Scandinavian Tobacco |
| CopAur Minerals |
Scandinavian Tobacco and CopAur Minerals Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and CopAur Minerals
The main advantage of trading using opposite Scandinavian Tobacco and CopAur Minerals positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, CopAur Minerals 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 CopAur Minerals will offset losses from the drop in CopAur Minerals' long position.| Scandinavian Tobacco vs. Universal | Scandinavian Tobacco vs. Imperial Brands PLC | Scandinavian Tobacco vs. Japan Tobacco ADR | Scandinavian Tobacco vs. Philip Morris International |
| CopAur Minerals vs. ATT Inc | CopAur Minerals vs. Merck Company | CopAur Minerals vs. Walt Disney | CopAur Minerals vs. Caterpillar |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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