Correlation Between ONEOK and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both ONEOK and Scandic Hotels 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 ONEOK and Scandic Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between ONEOK Inc and Scandic Hotels Group, you can compare the effects of market volatilities on ONEOK and Scandic Hotels 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 ONEOK with a short position of Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of ONEOK and Scandic Hotels.
Diversification Opportunities for ONEOK and Scandic Hotels
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between ONEOK and Scandic is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding ONEOK Inc and Scandic Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandic Hotels Group and ONEOK 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 ONEOK Inc are associated (or correlated) with Scandic Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandic Hotels Group has no effect on the direction of ONEOK i.e., ONEOK and Scandic Hotels go up and down completely randomly.
Pair Corralation between ONEOK and Scandic Hotels
Assuming the 90 days trading horizon ONEOK Inc is expected to generate 0.98 times more return on investment than Scandic Hotels. However, ONEOK Inc is 1.03 times less risky than Scandic Hotels. It trades about 0.18 of its potential returns per unit of risk. Scandic Hotels Group is currently generating about 0.17 per unit of risk. If you would invest 10,200 in ONEOK Inc on October 25, 2024 and sell it today you would earn a total of 520.00 from holding ONEOK Inc or generate 5.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
ONEOK Inc vs. Scandic Hotels Group
Performance |
| Timeline |
| ONEOK Inc |
| Scandic Hotels Group |
ONEOK and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with ONEOK and Scandic Hotels
The main advantage of trading using opposite ONEOK and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if ONEOK position performs unexpectedly, Scandic Hotels 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 Scandic Hotels will offset losses from the drop in Scandic Hotels' long position.| ONEOK vs. Universal Music Group | ONEOK vs. Cornish Metals | ONEOK vs. Travel Leisure Co | ONEOK vs. Arrow Electronics |
| Scandic Hotels vs. Toyota Motor Corp | Scandic Hotels vs. SoftBank Group Corp | Scandic Hotels vs. OTP Bank Nyrt | Scandic Hotels vs. ONEOK Inc |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
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