Correlation Between Scandinavian Tobacco and BankInvest Optima
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and BankInvest Optima 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 BankInvest Optima 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 BankInvest Optima 30, you can compare the effects of market volatilities on Scandinavian Tobacco and BankInvest Optima 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 BankInvest Optima. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and BankInvest Optima.
Diversification Opportunities for Scandinavian Tobacco and BankInvest Optima
-0.62 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scandinavian and BankInvest is -0.62. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and BankInvest Optima 30 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BankInvest Optima 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 BankInvest Optima. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BankInvest Optima has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and BankInvest Optima go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and BankInvest Optima
Assuming the 90 days trading horizon Scandinavian Tobacco Group is expected to under-perform the BankInvest Optima. In addition to that, Scandinavian Tobacco is 3.06 times more volatile than BankInvest Optima 30. It trades about -0.09 of its total potential returns per unit of risk. BankInvest Optima 30 is currently generating about 0.15 per unit of volatility. If you would invest 10,705 in BankInvest Optima 30 on August 29, 2024 and sell it today you would earn a total of 445.00 from holding BankInvest Optima 30 or generate 4.16% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 98.46% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. BankInvest Optima 30
Performance |
| Timeline |
| Scandinavian Tobacco |
| BankInvest Optima |
Scandinavian Tobacco and BankInvest Optima Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and BankInvest Optima
The main advantage of trading using opposite Scandinavian Tobacco and BankInvest Optima positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, BankInvest Optima 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 BankInvest Optima will offset losses from the drop in BankInvest Optima's long position.| Scandinavian Tobacco vs. Matas AS | Scandinavian Tobacco vs. Tryg AS | Scandinavian Tobacco vs. Alm Brand | Scandinavian Tobacco vs. Royal Unibrew AS |
| BankInvest Optima vs. Ringkjoebing Landbobank AS | BankInvest Optima vs. Vestjysk Bank AS | BankInvest Optima vs. Sydbank AS | BankInvest Optima vs. Carnegie Wealth Management |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
Other Complementary Tools
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Price Exposure Probability Analyze equity upside and downside potential for a given time horizon across multiple markets | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities |