Correlation Between 24SEVENOFFICE GROUP and IMPERIAL TOBACCO

Can any of the company-specific risk be diversified away by investing in both 24SEVENOFFICE GROUP and IMPERIAL 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 24SEVENOFFICE GROUP and IMPERIAL TOBACCO into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between 24SEVENOFFICE GROUP AB and IMPERIAL TOBACCO , you can compare the effects of market volatilities on 24SEVENOFFICE GROUP and IMPERIAL 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 24SEVENOFFICE GROUP with a short position of IMPERIAL TOBACCO. Check out your portfolio center. Please also check ongoing floating volatility patterns of 24SEVENOFFICE GROUP and IMPERIAL TOBACCO.

Diversification Opportunities for 24SEVENOFFICE GROUP and IMPERIAL TOBACCO

-0.56

Correlation Coefficient

24SEVENOFFICE GROUP  IMPERIAL TOBACCO

Excellent diversification

The 3 months correlation between 24SEVENOFFICE and IMPERIAL is -0.56. Overlapping area represents the amount of risk that can be diversified away by holding 24SEVENOFFICE GROUP AB and IMPERIAL TOBACCO in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on IMPERIAL TOBACCO and 24SEVENOFFICE GROUP 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 24SEVENOFFICE GROUP AB are associated (or correlated) with IMPERIAL TOBACCO. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of IMPERIAL TOBACCO has no effect on the direction of 24SEVENOFFICE GROUP i.e., 24SEVENOFFICE GROUP and IMPERIAL TOBACCO go up and down completely randomly.

Pair Corralation between 24SEVENOFFICE GROUP and IMPERIAL TOBACCO

Assuming the 90 days horizon 24SEVENOFFICE GROUP is expected to generate 1.89 times less return on investment than IMPERIAL TOBACCO. In addition to that, 24SEVENOFFICE GROUP is 4.33 times more volatile than IMPERIAL TOBACCO . It trades about 0.02 of its total potential returns per unit of risk. IMPERIAL TOBACCO is currently generating about 0.14 per unit of volatility. If you would invest  3,035  in IMPERIAL TOBACCO on December 26, 2024 and sell it today you would earn a total of  239.00  from holding IMPERIAL TOBACCO or generate 7.87% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

24SEVENOFFICE GROUP AB  vs.  IMPERIAL TOBACCO

24SEVENOFFICE GROUP

Risk-Adjusted Performance

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in 24SEVENOFFICE GROUP AB are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable basic indicators, 24SEVENOFFICE GROUP is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

IMPERIAL TOBACCO

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in IMPERIAL TOBACCO are ranked lower than 11 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain fundamental drivers, IMPERIAL TOBACCO may actually be approaching a critical reversion point that can send shares even higher in April 2025.

Pair Trading with 24SEVENOFFICE GROUP and IMPERIAL TOBACCO

The main advantage of trading using opposite 24SEVENOFFICE GROUP and IMPERIAL TOBACCO positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if 24SEVENOFFICE GROUP position performs unexpectedly, IMPERIAL 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 IMPERIAL TOBACCO will offset losses from the drop in IMPERIAL TOBACCO's long position.

The idea behind 24SEVENOFFICE GROUP AB and IMPERIAL TOBACCO pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.