Correlation Between Scandic Hotels and Broadridge Financial
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Broadridge Financial 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 Scandic Hotels and Broadridge Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandic Hotels Group and Broadridge Financial Solutions, you can compare the effects of market volatilities on Scandic Hotels and Broadridge Financial 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 Scandic Hotels with a short position of Broadridge Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Broadridge Financial.
Diversification Opportunities for Scandic Hotels and Broadridge Financial
-0.28 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scandic and Broadridge is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Broadridge Financial Solutions in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Broadridge Financial and Scandic Hotels 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 Scandic Hotels Group are associated (or correlated) with Broadridge Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Broadridge Financial has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Broadridge Financial go up and down completely randomly.
Pair Corralation between Scandic Hotels and Broadridge Financial
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 1.45 times more return on investment than Broadridge Financial. However, Scandic Hotels is 1.45 times more volatile than Broadridge Financial Solutions. It trades about 0.09 of its potential returns per unit of risk. Broadridge Financial Solutions is currently generating about 0.1 per unit of risk. If you would invest 3,250 in Scandic Hotels Group on September 12, 2024 and sell it today you would earn a total of 3,570 from holding Scandic Hotels Group or generate 109.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.17% |
| Values | Daily Returns |
Scandic Hotels Group vs. Broadridge Financial Solutions
Performance |
| Timeline |
| Scandic Hotels Group |
| Broadridge Financial |
Scandic Hotels and Broadridge Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Broadridge Financial
The main advantage of trading using opposite Scandic Hotels and Broadridge Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Broadridge Financial 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 Broadridge Financial will offset losses from the drop in Broadridge Financial's long position.| Scandic Hotels vs. Hong Kong Land | Scandic Hotels vs. Neometals | Scandic Hotels vs. Coor Service Management | Scandic Hotels vs. Fidelity Sustainable USD |
| Broadridge Financial vs. Hong Kong Land | Broadridge Financial vs. Neometals | Broadridge Financial vs. Coor Service Management | Broadridge Financial vs. Fidelity Sustainable USD |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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