Correlation Between Scandic Hotels and Live Nation
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Live Nation 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 Live Nation 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 Live Nation Entertainment, you can compare the effects of market volatilities on Scandic Hotels and Live Nation 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 Live Nation. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Live Nation.
Diversification Opportunities for Scandic Hotels and Live Nation
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scandic and Live is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Live Nation Entertainment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Live Nation Entertainment 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 Live Nation. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Live Nation Entertainment has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Live Nation go up and down completely randomly.
Pair Corralation between Scandic Hotels and Live Nation
Assuming the 90 days trading horizon Scandic Hotels is expected to generate 1.01 times less return on investment than Live Nation. But when comparing it to its historical volatility, Scandic Hotels Group is 1.03 times less risky than Live Nation. It trades about 0.07 of its potential returns per unit of risk. Live Nation Entertainment is currently generating about 0.06 of returns per unit of risk over similar time horizon. If you would invest 7,578 in Live Nation Entertainment on October 12, 2024 and sell it today you would earn a total of 5,410 from holding Live Nation Entertainment or generate 71.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.4% |
| Values | Daily Returns |
Scandic Hotels Group vs. Live Nation Entertainment
Performance |
| Timeline |
| Scandic Hotels Group |
| Live Nation Entertainment |
Scandic Hotels and Live Nation Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Live Nation
The main advantage of trading using opposite Scandic Hotels and Live Nation positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Live Nation 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 Live Nation will offset losses from the drop in Live Nation's long position.| Scandic Hotels vs. Polar Capital Technology | Scandic Hotels vs. CAP LEASE AVIATION | Scandic Hotels vs. Pfeiffer Vacuum Technology | Scandic Hotels vs. Sunny Optical Technology |
| Live Nation vs. Software Circle plc | Live Nation vs. Scandic Hotels Group | Live Nation vs. Sabien Technology Group | Live Nation vs. Melia Hotels |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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