Correlation Between Scandinavian Tobacco and BAIDU
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By analyzing existing cross correlation between Scandinavian Tobacco Group and BAIDU INC 4125, you can compare the effects of market volatilities on Scandinavian Tobacco and BAIDU 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 BAIDU. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and BAIDU.
Diversification Opportunities for Scandinavian Tobacco and BAIDU
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Scandinavian and BAIDU is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and BAIDU INC 4125 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BAIDU INC 4125 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 BAIDU. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BAIDU INC 4125 has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and BAIDU go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and BAIDU
Assuming the 90 days horizon Scandinavian Tobacco is expected to generate 318.79 times less return on investment than BAIDU. But when comparing it to its historical volatility, Scandinavian Tobacco Group is 61.09 times less risky than BAIDU. It trades about 0.02 of its potential returns per unit of risk. BAIDU INC 4125 is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 9,719 in BAIDU INC 4125 on September 2, 2024 and sell it today you would earn a total of 140.00 from holding BAIDU INC 4125 or generate 1.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 21.18% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. BAIDU INC 4125
Performance |
| Timeline |
| Scandinavian Tobacco |
| BAIDU INC 4125 |
Scandinavian Tobacco and BAIDU Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and BAIDU
The main advantage of trading using opposite Scandinavian Tobacco and BAIDU positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, BAIDU 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 BAIDU will offset losses from the drop in BAIDU'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 |
| BAIDU vs. National Beverage Corp | BAIDU vs. Tower One Wireless | BAIDU vs. Brandywine Realty Trust | BAIDU vs. The Coca Cola |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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