Correlation Between Scandinavian Tobacco and BOS Better

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

Diversification Opportunities for Scandinavian Tobacco and BOS Better

0.0
  Correlation Coefficient

Pay attention - limited upside

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

Pair Corralation between Scandinavian Tobacco and BOS Better

If you would invest  281.00  in BOS Better Online on December 30, 2023 and sell it today you would earn a total of  24.00  from holding BOS Better Online or generate 8.54% return on investment over 90 days.
Time Period3 Months [change]
DirectionFlat 
StrengthInsignificant
Accuracy0.0%
ValuesDaily Returns

Scandinavian Tobacco Group  vs.  BOS Better Online

 Performance 
       Timeline  
Scandinavian Tobacco 

Risk-Adjusted Performance

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High
Insignificant
Over the last 90 days Scandinavian Tobacco Group has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Scandinavian Tobacco is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.
BOS Better Online 

Risk-Adjusted Performance

9 of 100

 
Low
 
High
OK
Compared to the overall equity markets, risk-adjusted returns on investments in BOS Better Online are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather weak basic indicators, BOS Better exhibited solid returns over the last few months and may actually be approaching a breakup point.

Scandinavian Tobacco and BOS Better Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Scandinavian Tobacco and BOS Better

The main advantage of trading using opposite Scandinavian Tobacco and BOS Better positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandinavian Tobacco position performs unexpectedly, BOS Better 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 BOS Better will offset losses from the drop in BOS Better's long position.
The idea behind Scandinavian Tobacco Group and BOS Better Online 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.

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