Correlation Between Public Storage and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both Public Storage 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 Public Storage and Scandic Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Public Storage and Scandic Hotels Group, you can compare the effects of market volatilities on Public Storage 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 Public Storage with a short position of Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Public Storage and Scandic Hotels.
Diversification Opportunities for Public Storage and Scandic Hotels
0.1 | Correlation Coefficient |
Average diversification
The 3 months correlation between Public and Scandic is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Public Storage 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 Public Storage 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 Public Storage 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 Public Storage i.e., Public Storage and Scandic Hotels go up and down completely randomly.
Pair Corralation between Public Storage and Scandic Hotels
Assuming the 90 days trading horizon Public Storage is expected to under-perform the Scandic Hotels. In addition to that, Public Storage is 1.02 times more volatile than Scandic Hotels Group. It trades about -0.44 of its total potential returns per unit of risk. Scandic Hotels Group is currently generating about 0.12 per unit of volatility. If you would invest 6,541 in Scandic Hotels Group on September 24, 2024 and sell it today you would earn a total of 227.00 from holding Scandic Hotels Group or generate 3.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Public Storage vs. Scandic Hotels Group
Performance |
| Timeline |
| Public Storage |
| Scandic Hotels Group |
Public Storage and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Public Storage and Scandic Hotels
The main advantage of trading using opposite Public Storage and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Public Storage 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.| Public Storage vs. Premier Foods PLC | Public Storage vs. Eco Animal Health | Public Storage vs. Grieg Seafood | Public Storage vs. Naturhouse Health SA |
| Scandic Hotels vs. Public Storage | Scandic Hotels vs. Foresight Environmental Infrastructure | Scandic Hotels vs. GlobalData PLC | Scandic Hotels vs. British American Tobacco |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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