Correlation Between Victrex Plc and Scandinavian Tobacco

Can any of the company-specific risk be diversified away by investing in both Victrex Plc 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 Victrex Plc and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Victrex plc and Scandinavian Tobacco Group, you can compare the effects of market volatilities on Victrex Plc 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 Victrex Plc with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of Victrex Plc and Scandinavian Tobacco.

Diversification Opportunities for Victrex Plc and Scandinavian Tobacco

0.72

Correlation Coefficient

Victrex Plc  Scandinavian Tobacco

Poor diversification

The 3 months correlation between Victrex and Scandinavian is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Victrex plc and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and Victrex Plc 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 Victrex plc 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 Victrex Plc i.e., Victrex Plc and Scandinavian Tobacco go up and down completely randomly.

Pair Corralation between Victrex Plc and Scandinavian Tobacco

Assuming the 90 days trading horizon Victrex plc is expected to under-perform the Scandinavian Tobacco. In addition to that, Victrex Plc is 1.24 times more volatile than Scandinavian Tobacco Group. It trades about -0.1 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about -0.08 per unit of volatility. If you would invest  9,440  in Scandinavian Tobacco Group on April 24, 2025 and sell it today you would lose (875.00) from holding Scandinavian Tobacco Group or give up 9.27% of portfolio value over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Victrex plc  vs.  Scandinavian Tobacco Group

Victrex plc

Risk-Adjusted Performance

Very Weak

Over the last 90 days Victrex plc has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's technical and fundamental indicators remain rather sound which may send shares a bit higher in August 2025. The latest tumult may also be a sign of longer-term up-swing for the firm shareholders.

Scandinavian Tobacco

Risk-Adjusted Performance

Very Weak

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 uncertain performance, the Stock's basic indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Pair Trading with Victrex Plc and Scandinavian Tobacco

The main advantage of trading using opposite Victrex Plc and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Victrex Plc 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.

The idea behind Victrex plc and Scandinavian Tobacco Group 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.