Correlation Between Scandinavian Tobacco and Sydbank AS
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Sydbank AS 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 Sydbank AS 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 Sydbank AS, you can compare the effects of market volatilities on Scandinavian Tobacco and Sydbank AS 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 Sydbank AS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Sydbank AS.
Diversification Opportunities for Scandinavian Tobacco and Sydbank AS
-0.58 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scandinavian and Sydbank is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Sydbank AS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sydbank AS 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 Sydbank AS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sydbank AS has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Sydbank AS go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and Sydbank AS
Assuming the 90 days trading horizon Scandinavian Tobacco Group is expected to under-perform the Sydbank AS. In addition to that, Scandinavian Tobacco is 1.22 times more volatile than Sydbank AS. It trades about -0.1 of its total potential returns per unit of risk. Sydbank AS is currently generating about 0.15 per unit of volatility. If you would invest 32,900 in Sydbank AS on August 29, 2024 and sell it today you would earn a total of 1,920 from holding Sydbank AS or generate 5.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandinavian Tobacco Group vs. Sydbank AS
Performance |
| Timeline |
| Scandinavian Tobacco |
| Sydbank AS |
Scandinavian Tobacco and Sydbank AS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandinavian Tobacco and Sydbank AS
The main advantage of trading using opposite Scandinavian Tobacco and Sydbank AS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Sydbank AS 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 Sydbank AS will offset losses from the drop in Sydbank AS's long position.| Scandinavian Tobacco vs. Matas AS | Scandinavian Tobacco vs. Tryg AS | Scandinavian Tobacco vs. Alm Brand | Scandinavian Tobacco vs. Royal Unibrew AS |
| Sydbank AS vs. Jyske Bank AS | Sydbank AS vs. Tryg AS | Sydbank AS vs. FLSmidth Co | Sydbank AS vs. Nordea Bank Abp |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Performance Analysis Check effects of mean-variance optimization against your current asset allocation | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Top Crypto Exchanges Search and analyze digital assets across top global cryptocurrency exchanges |