Correlation Between Scandic Hotels and Park Hotels
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Park 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 Scandic Hotels and Park Hotels 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 Park Hotels Resorts, you can compare the effects of market volatilities on Scandic Hotels and Park 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 Scandic Hotels with a short position of Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Park Hotels.
Diversification Opportunities for Scandic Hotels and Park Hotels
-0.14 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scandic and Park is -0.14. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts 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 Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Park Hotels go up and down completely randomly.
Pair Corralation between Scandic Hotels and Park Hotels
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 0.61 times more return on investment than Park Hotels. However, Scandic Hotels Group is 1.64 times less risky than Park Hotels. It trades about 0.08 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.04 per unit of risk. If you would invest 4,179 in Scandic Hotels Group on August 31, 2024 and sell it today you would earn a total of 2,543 from holding Scandic Hotels Group or generate 60.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 93.92% |
| Values | Daily Returns |
Scandic Hotels Group vs. Park Hotels Resorts
Performance |
| Timeline |
| Scandic Hotels Group |
| Park Hotels Resorts |
Scandic Hotels and Park Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Park Hotels
The main advantage of trading using opposite Scandic Hotels and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Park 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 Park Hotels will offset losses from the drop in Park Hotels' long position.| Scandic Hotels vs. Molson Coors Beverage | Scandic Hotels vs. Fevertree Drinks Plc | Scandic Hotels vs. Aurora Investment Trust | Scandic Hotels vs. Smithson Investment Trust |
| Park Hotels vs. Neometals | Park Hotels vs. Coor Service Management | Park Hotels vs. Aeorema Communications Plc | Park Hotels vs. JLEN Environmental Assets |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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