Correlation Between Coor Service and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both Coor Service 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 Coor Service and Scandic Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Coor Service Management and Scandic Hotels Group, you can compare the effects of market volatilities on Coor Service 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 Coor Service with a short position of Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Coor Service and Scandic Hotels.
Diversification Opportunities for Coor Service and Scandic Hotels
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Coor and Scandic is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Coor Service Management 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 Coor Service 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 Coor Service Management 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 Coor Service i.e., Coor Service and Scandic Hotels go up and down completely randomly.
Pair Corralation between Coor Service and Scandic Hotels
Assuming the 90 days trading horizon Coor Service Management is expected to generate 0.91 times more return on investment than Scandic Hotels. However, Coor Service Management is 1.1 times less risky than Scandic Hotels. It trades about 0.04 of its potential returns per unit of risk. Scandic Hotels Group is currently generating about -0.03 per unit of risk. If you would invest 3,474 in Coor Service Management on September 13, 2024 and sell it today you would earn a total of 39.00 from holding Coor Service Management or generate 1.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Coor Service Management vs. Scandic Hotels Group
Performance |
| Timeline |
| Coor Service Management |
| Scandic Hotels Group |
Coor Service and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Coor Service and Scandic Hotels
The main advantage of trading using opposite Coor Service and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Coor Service 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.| Coor Service vs. Blackstone Loan Financing | Coor Service vs. One Media iP | Coor Service vs. Live Nation Entertainment | Coor Service vs. Grand Vision Media |
| Scandic Hotels vs. National Bank of | Scandic Hotels vs. Royal Bank of | Scandic Hotels vs. Games Workshop Group | Scandic Hotels vs. Komercni Banka |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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