Correlation Between Scandinavian Tobacco and DISTRICT METALS
Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and DISTRICT METALS 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 DISTRICT METALS 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 DISTRICT METALS, you can compare the effects of market volatilities on Scandinavian Tobacco and DISTRICT METALS 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 DISTRICT METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and DISTRICT METALS.
Diversification Opportunities for Scandinavian Tobacco and DISTRICT METALS
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scandinavian and DISTRICT is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and DISTRICT METALS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on DISTRICT METALS 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 DISTRICT METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of DISTRICT METALS has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and DISTRICT METALS go up and down completely randomly.
Pair Corralation between Scandinavian Tobacco and DISTRICT METALS
Assuming the 90 days horizon Scandinavian Tobacco is expected to generate 1.47 times less return on investment than DISTRICT METALS. But when comparing it to its historical volatility, Scandinavian Tobacco Group is 1.03 times less risky than DISTRICT METALS. It trades about 0.05 of its potential returns per unit of risk. DISTRICT METALS is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest 11.00 in DISTRICT METALS on September 20, 2024 and sell it today you would earn a total of 12.00 from holding DISTRICT METALS or generate 109.09% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Scandinavian Tobacco Group vs. DISTRICT METALS
Performance |
Timeline |
Scandinavian Tobacco |
DISTRICT METALS |
Scandinavian Tobacco and DISTRICT METALS Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Scandinavian Tobacco and DISTRICT METALS
The main advantage of trading using opposite Scandinavian Tobacco and DISTRICT METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, DISTRICT METALS 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 DISTRICT METALS will offset losses from the drop in DISTRICT METALS's long position.Scandinavian Tobacco vs. Regions Financial | Scandinavian Tobacco vs. PT Bank Maybank | Scandinavian Tobacco vs. CHIBA BANK | Scandinavian Tobacco vs. Tradegate AG Wertpapierhandelsbank |
DISTRICT METALS vs. American Lithium Corp | DISTRICT METALS vs. ADRIATIC METALS LS 013355 | DISTRICT METALS vs. Superior Plus Corp | DISTRICT METALS vs. SIVERS SEMICONDUCTORS AB |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
Equity Search Search for actively traded equities including funds and ETFs from over 30 global markets | |
Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
Bollinger Bands Use Bollinger Bands indicator to analyze target price for a given investing horizon | |
Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |