Correlation Between Calibre Mining and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both Calibre Mining 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 Calibre Mining and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Calibre Mining Corp and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Calibre Mining 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 Calibre Mining with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Calibre Mining and Scandinavian Tobacco.
Diversification Opportunities for Calibre Mining and Scandinavian Tobacco
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Calibre and Scandinavian is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Calibre Mining Corp and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Calibre Mining 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 Calibre Mining Corp 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 Calibre Mining i.e., Calibre Mining and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between Calibre Mining and Scandinavian Tobacco
Assuming the 90 days trading horizon Calibre Mining Corp is expected to under-perform the Scandinavian Tobacco. In addition to that, Calibre Mining is 1.22 times more volatile than Scandinavian Tobacco Group. It trades about -0.14 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about -0.11 per unit of volatility. If you would invest 1,376 in Scandinavian Tobacco Group on September 23, 2024 and sell it today you would lose (136.00) from holding Scandinavian Tobacco Group or give up 9.88% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
Calibre Mining Corp vs. Scandinavian Tobacco Group
Performance |
Timeline |
Calibre Mining Corp |
Scandinavian Tobacco |
Calibre Mining and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Calibre Mining and Scandinavian Tobacco
The main advantage of trading using opposite Calibre Mining and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Calibre Mining 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.Calibre Mining vs. SPORT LISBOA E | Calibre Mining vs. Yuexiu Transport Infrastructure | Calibre Mining vs. Transportadora de Gas | Calibre Mining vs. NTG Nordic Transport |
Scandinavian Tobacco vs. Magnachip Semiconductor | Scandinavian Tobacco vs. TOREX SEMICONDUCTOR LTD | Scandinavian Tobacco vs. LEGACY IRON ORE | Scandinavian Tobacco vs. Khiron Life Sciences |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
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