Correlation Between Tradegate and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Tradegate and Scandinavian Tobacco 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 Tradegate and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Tradegate AG Wertpapierhandelsbank and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Tradegate and Scandinavian Tobacco 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 Tradegate with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Tradegate and Scandinavian Tobacco.
Diversification Opportunities for Tradegate and Scandinavian Tobacco
-0.17 | Correlation Coefficient |
Good diversification
The 3 months correlation between Tradegate and Scandinavian is -0.17. Overlapping area represents the amount of risk that can be diversified away by holding Tradegate AG Wertpapierhandels and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Tradegate 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 Tradegate AG Wertpapierhandelsbank are associated (or correlated) with Scandinavian Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Tobacco has no effect on the direction of Tradegate i.e., Tradegate and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Tradegate and Scandinavian Tobacco
Assuming the 90 days horizon Tradegate AG Wertpapierhandelsbank is expected to under-perform the Scandinavian Tobacco. But the stock apears to be less risky and, when comparing its historical volatility, Tradegate AG Wertpapierhandelsbank is 4.22 times less risky than Scandinavian Tobacco. The stock trades about -0.05 of its potential returns per unit of risk. The Scandinavian Tobacco Group is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 753.00 in Scandinavian Tobacco Group on September 20, 2024 and sell it today you would earn a total of 517.00 from holding Scandinavian Tobacco Group or generate 68.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Tradegate AG Wertpapierhandels vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| Tradegate AG Wertpap |
| Scandinavian Tobacco |
Tradegate and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Tradegate and Scandinavian Tobacco
The main advantage of trading using opposite Tradegate and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Tradegate position performs unexpectedly, Scandinavian Tobacco 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 Scandinavian Tobacco will offset losses from the drop in Scandinavian Tobacco's long position.| Tradegate vs. Superior Plus Corp | Tradegate vs. SIVERS SEMICONDUCTORS AB | Tradegate vs. CHINA HUARONG ENERHD 50 | Tradegate vs. NORDIC HALIBUT AS |
| Scandinavian Tobacco vs. Regions Financial | Scandinavian Tobacco vs. PT Bank Maybank | Scandinavian Tobacco vs. CHIBA BANK | Scandinavian Tobacco vs. Tradegate AG Wertpapierhandelsbank |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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