Correlation Between Scandinavian Tobacco and International Media
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and International Media 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 International Media 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 International Media Acquisition, you can compare the effects of market volatilities on Scandinavian Tobacco and International Media 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 International Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and International Media.
Diversification Opportunities for Scandinavian Tobacco and International Media
-0.42 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scandinavian and International is -0.42. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and International Media Acquisitio in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on International Media 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 International Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of International Media has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and International Media go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and International Media
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to generate 1.31 times more return on investment than International Media. However, Scandinavian Tobacco is 1.31 times more volatile than International Media Acquisition. It trades about 0.03 of its potential returns per unit of risk. International Media Acquisition is currently generating about 0.03 per unit of risk. If you would invest 608.00 in Scandinavian Tobacco Group on August 24, 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 Against |
| Strength | Very Weak |
| Accuracy | 85.66% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. International Media Acquisitio
Performance |
| Timeline |
| Scandinavian Tobacco |
| International Media |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
Scandinavian Tobacco and International Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and International Media
The main advantage of trading using opposite Scandinavian Tobacco and International Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, International Media 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 International Media will offset losses from the drop in International Media'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 |
| International Media vs. Aerofoam Metals | International Media vs. Boston Beer | International Media vs. Westrock Coffee | International Media vs. Scandinavian Tobacco Group |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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