Correlation Between MINCO SILVER and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both MINCO SILVER 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 MINCO SILVER and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MINCO SILVER and Scandinavian Tobacco Group, you can compare the effects of market volatilities on MINCO SILVER 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 MINCO SILVER with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of MINCO SILVER and Scandinavian Tobacco.
Diversification Opportunities for MINCO SILVER and Scandinavian Tobacco
-0.41 | Correlation Coefficient |
Very good diversification
The 3 months correlation between MINCO and Scandinavian is -0.41. Overlapping area represents the amount of risk that can be diversified away by holding MINCO SILVER and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and MINCO SILVER 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 MINCO SILVER 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 MINCO SILVER i.e., MINCO SILVER and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between MINCO SILVER and Scandinavian Tobacco
Assuming the 90 days trading horizon MINCO SILVER is expected to generate 6.03 times less return on investment than Scandinavian Tobacco. But when comparing it to its historical volatility, MINCO SILVER is 1.57 times less risky than Scandinavian Tobacco. It trades about 0.01 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 468.00 in Scandinavian Tobacco Group on August 26, 2024 and sell it today you would earn a total of 812.00 from holding Scandinavian Tobacco Group or generate 173.5% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MINCO SILVER vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| MINCO SILVER |
| Scandinavian Tobacco |
MINCO SILVER and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MINCO SILVER and Scandinavian Tobacco
The main advantage of trading using opposite MINCO SILVER and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MINCO SILVER 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.| MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc | MINCO SILVER vs. Apple Inc |
| Scandinavian Tobacco vs. TFS FINANCIAL | Scandinavian Tobacco vs. PT Bank Maybank | Scandinavian Tobacco vs. CHIBA BANK | Scandinavian Tobacco vs. Kaiser Aluminum |
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 Money Managers module to screen money managers from public funds and ETFs managed around the world.
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