Correlation Between Scandic Hotels and Fidelity National
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Fidelity National 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 Fidelity National 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 Fidelity National Information, you can compare the effects of market volatilities on Scandic Hotels and Fidelity National 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 Fidelity National. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Fidelity National.
Diversification Opportunities for Scandic Hotels and Fidelity National
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Scandic and Fidelity is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Fidelity National Information in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fidelity National 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 Fidelity National. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fidelity National has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Fidelity National go up and down completely randomly.
Pair Corralation between Scandic Hotels and Fidelity National
Assuming the 90 days trading horizon Scandic Hotels Group is expected to under-perform the Fidelity National. In addition to that, Scandic Hotels is 1.43 times more volatile than Fidelity National Information. It trades about -0.06 of its total potential returns per unit of risk. Fidelity National Information is currently generating about 0.06 per unit of volatility. If you would invest 8,346 in Fidelity National Information on August 30, 2024 and sell it today you would earn a total of 221.00 from holding Fidelity National Information or generate 2.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandic Hotels Group vs. Fidelity National Information
Performance |
| Timeline |
| Scandic Hotels Group |
| Fidelity National |
Scandic Hotels and Fidelity National Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Fidelity National
The main advantage of trading using opposite Scandic Hotels and Fidelity National positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Fidelity National 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 Fidelity National will offset losses from the drop in Fidelity National's long position.| Scandic Hotels vs. Tungsten West PLC | Scandic Hotels vs. Argo Group Limited | Scandic Hotels vs. Hardide PLC | Scandic Hotels vs. Versarien PLC |
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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 Bollinger Bands module to use Bollinger Bands indicator to analyze target price for a given investing horizon.
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