Correlation Between Scandinavian Tobacco and Eatware

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Can any of the company-specific risk be diversified away by investing in both Scandinavian Tobacco and Eatware 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 Eatware 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 Eatware, you can compare the effects of market volatilities on Scandinavian Tobacco and Eatware 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 Eatware. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandinavian Tobacco and Eatware.

Diversification Opportunities for Scandinavian Tobacco and Eatware

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  Correlation Coefficient

Pay attention - limited upside

The 3 months correlation between Scandinavian and Eatware is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Scandinavian Tobacco Group and Eatware in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Eatware 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 Eatware. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Eatware has no effect on the direction of Scandinavian Tobacco i.e., Scandinavian Tobacco and Eatware go up and down completely randomly.

Pair Corralation between Scandinavian Tobacco and Eatware

If you would invest  608.00  in Scandinavian Tobacco Group on October 22, 2024 and sell it today you would earn a total of  92.00  from holding Scandinavian Tobacco Group or generate 15.13% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy99.6%
ValuesDaily Returns

Scandinavian Tobacco Group  vs.  Eatware

 Performance 
       Timeline  
Scandinavian Tobacco 

Risk-Adjusted Performance

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Over the last 90 days Scandinavian Tobacco Group has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's technical and fundamental indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.
Eatware 

Risk-Adjusted Performance

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Weak
 
Strong
Very Weak
Over the last 90 days Eatware has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fairly strong basic indicators, Eatware is not utilizing all of its potentials. The latest stock price confusion, may contribute to short-horizon losses for the traders.

Scandinavian Tobacco and Eatware Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Scandinavian Tobacco and Eatware

The main advantage of trading using opposite Scandinavian Tobacco and Eatware positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, Eatware 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 Eatware will offset losses from the drop in Eatware's long position.
The idea behind Scandinavian Tobacco Group and Eatware 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.
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.

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