Correlation Between Scandinavian Tobacco and Rumble
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Rumble 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 Rumble 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 Rumble Inc, you can compare the effects of market volatilities on Scandinavian Tobacco and Rumble 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 Rumble. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Rumble.
Diversification Opportunities for Scandinavian Tobacco and Rumble
-0.38 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scandinavian and Rumble is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Rumble Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Rumble 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 Rumble. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Rumble Inc has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Rumble go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Rumble
Assuming the 90 days horizon Scandinavian Tobacco is expected to generate 2.13 times less return on investment than Rumble. But when comparing it to its historical volatility, Scandinavian Tobacco Group is 2.91 times less risky than Rumble. It trades about 0.03 of its potential returns per unit of risk. Rumble Inc is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest 763.00 in Rumble Inc on August 31, 2024 and sell it today you would lose (50.00) from holding Rumble Inc or give up 6.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. Rumble Inc
Performance |
| Timeline |
| Scandinavian Tobacco |
| Rumble Inc |
Scandinavian Tobacco and Rumble Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Rumble
The main advantage of trading using opposite Scandinavian Tobacco and Rumble positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Rumble 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 Rumble will offset losses from the drop in Rumble'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 |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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