Correlation Between Scandinavian Tobacco and Lead Real
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Lead Real 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 Lead Real 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 Lead Real Estate, you can compare the effects of market volatilities on Scandinavian Tobacco and Lead Real 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 Lead Real. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Lead Real.
Diversification Opportunities for Scandinavian Tobacco and Lead Real
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scandinavian and Lead is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Lead Real Estate in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lead Real Estate 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 Lead Real. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lead Real Estate has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Lead Real go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Lead Real
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to under-perform the Lead Real. But the pink sheet apears to be less risky and, when comparing its historical volatility, Scandinavian Tobacco Group is 7.58 times less risky than Lead Real. The pink sheet trades about -0.28 of its potential returns per unit of risk. The Lead Real Estate is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 156.00 in Lead Real Estate on August 24, 2024 and sell it today you would earn a total of 61.00 from holding Lead Real Estate or generate 39.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. Lead Real Estate
Performance |
| Timeline |
| Scandinavian Tobacco |
| Lead Real Estate |
Scandinavian Tobacco and Lead Real Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Lead Real
The main advantage of trading using opposite Scandinavian Tobacco and Lead Real positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Lead Real 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 Lead Real will offset losses from the drop in Lead Real's long position.| Scandinavian Tobacco vs. British American Tobacco | Scandinavian Tobacco vs. Imperial Brands PLC | Scandinavian Tobacco vs. RLX Technology | Scandinavian Tobacco vs. British American Tobacco |
| Lead Real vs. Alset Ehome International | Lead Real vs. Xinyuan Real Estate | Lead Real vs. Murano Global Investments | Lead Real vs. Landsea Homes |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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