Correlation Between Scandinavian Tobacco and Hertz Global
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Hertz Global 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 Hertz Global 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 Hertz Global Holdings, you can compare the effects of market volatilities on Scandinavian Tobacco and Hertz Global 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 Hertz Global. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Hertz Global.
Diversification Opportunities for Scandinavian Tobacco and Hertz Global
-0.72 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Scandinavian and Hertz is -0.72. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Hertz Global Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hertz Global Holdings 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 Hertz Global. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hertz Global Holdings has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Hertz Global go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Hertz Global
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to under-perform the Hertz Global. But the pink sheet apears to be less risky and, when comparing its historical volatility, Scandinavian Tobacco Group is 3.95 times less risky than Hertz Global. The pink sheet trades about -0.28 of its potential returns per unit of risk. The Hertz Global Holdings is currently generating about 0.6 of returns per unit of risk over similar time horizon. If you would invest 279.00 in Hertz Global Holdings on September 2, 2024 and sell it today you would earn a total of 213.00 from holding Hertz Global Holdings or generate 76.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. Hertz Global Holdings
Performance |
| Timeline |
| Scandinavian Tobacco |
| Hertz Global Holdings |
Scandinavian Tobacco and Hertz Global Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Hertz Global
The main advantage of trading using opposite Scandinavian Tobacco and Hertz Global positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Hertz Global 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 Hertz Global will offset losses from the drop in Hertz Global's long position.| Scandinavian Tobacco vs. Universal | Scandinavian Tobacco vs. Imperial Brands PLC | Scandinavian Tobacco vs. Japan Tobacco ADR | Scandinavian Tobacco vs. Philip Morris International |
| Hertz Global vs. United Rentals | Hertz Global vs. Ryder System | Hertz Global vs. Herc Holdings | Hertz Global vs. Hertz Global Hldgs |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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