Correlation Between DRDGOLD Limited and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both DRDGOLD Limited 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 DRDGOLD Limited and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DRDGOLD Limited ADR and Scandinavian Tobacco Group, you can compare the effects of market volatilities on DRDGOLD Limited 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 DRDGOLD Limited with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of DRDGOLD Limited and Scandinavian Tobacco.
Diversification Opportunities for DRDGOLD Limited and Scandinavian Tobacco
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between DRDGOLD and Scandinavian is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding DRDGOLD Limited ADR and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and DRDGOLD Limited 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 DRDGOLD Limited ADR 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 DRDGOLD Limited i.e., DRDGOLD Limited and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between DRDGOLD Limited and Scandinavian Tobacco
Considering the 90-day investment horizon DRDGOLD Limited ADR is expected to generate 3.32 times more return on investment than Scandinavian Tobacco. However, DRDGOLD Limited is 3.32 times more volatile than Scandinavian Tobacco Group. It trades about 0.22 of its potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.06 per unit of risk. If you would invest 1,830 in DRDGOLD Limited ADR on August 29, 2025 and sell it today you would earn a total of 1,112 from holding DRDGOLD Limited ADR or generate 60.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 98.44% |
| Values | Daily Returns |
DRDGOLD Limited ADR vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| DRDGOLD Limited ADR |
| Scandinavian Tobacco |
DRDGOLD Limited and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DRDGOLD Limited and Scandinavian Tobacco
The main advantage of trading using opposite DRDGOLD Limited and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DRDGOLD Limited 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.| DRDGOLD Limited vs. Nissan Chemical | DRDGOLD Limited vs. Gex Management | DRDGOLD Limited vs. Greentown Management Holdings | DRDGOLD Limited vs. X FAB Silicon Foundries |
| Scandinavian Tobacco vs. Quipt Home Medical | Scandinavian Tobacco vs. BJs Restaurants | Scandinavian Tobacco vs. Nobility Homes | Scandinavian Tobacco vs. Hooker Furniture |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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