Correlation Between Scandinavian Tobacco and 459200KX8
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By analyzing existing cross correlation between Scandinavian Tobacco Group and IBM 45 06 FEB 28, you can compare the effects of market volatilities on Scandinavian Tobacco and 459200KX8 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 459200KX8. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and 459200KX8.
Diversification Opportunities for Scandinavian Tobacco and 459200KX8
0.02 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Scandinavian and 459200KX8 is 0.02. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and IBM 45 06 FEB 28 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IBM 45 06 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 459200KX8. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IBM 45 06 has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and 459200KX8 go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and 459200KX8
Assuming the 90 days horizon Scandinavian Tobacco Group is expected to under-perform the 459200KX8. In addition to that, Scandinavian Tobacco is 4.68 times more volatile than IBM 45 06 FEB 28. It trades about -0.28 of its total potential returns per unit of risk. IBM 45 06 FEB 28 is currently generating about 0.13 per unit of volatility. If you would invest 10,002 in IBM 45 06 FEB 28 on August 29, 2024 and sell it today you would earn a total of 75.00 from holding IBM 45 06 FEB 28 or generate 0.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. IBM 45 06 FEB 28
Performance |
| Timeline |
| Scandinavian Tobacco |
| IBM 45 06 |
Scandinavian Tobacco and 459200KX8 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and 459200KX8
The main advantage of trading using opposite Scandinavian Tobacco and 459200KX8 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, 459200KX8 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 459200KX8 will offset losses from the drop in 459200KX8'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 |
| 459200KX8 vs. Hawkins | 459200KX8 vs. Here Media | 459200KX8 vs. Avient Corp | 459200KX8 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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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