Correlation Between Scandic Hotels and AMG Advanced
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and AMG Advanced 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 AMG Advanced 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 AMG Advanced Metallurgical, you can compare the effects of market volatilities on Scandic Hotels and AMG Advanced 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 AMG Advanced. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and AMG Advanced.
Diversification Opportunities for Scandic Hotels and AMG Advanced
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scandic and AMG is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and AMG Advanced Metallurgical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on AMG Advanced Metallu 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 AMG Advanced. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of AMG Advanced Metallu has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and AMG Advanced go up and down completely randomly.
Pair Corralation between Scandic Hotels and AMG Advanced
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 0.75 times more return on investment than AMG Advanced. However, Scandic Hotels Group is 1.34 times less risky than AMG Advanced. It trades about 0.1 of its potential returns per unit of risk. AMG Advanced Metallurgical is currently generating about -0.23 per unit of risk. If you would invest 6,517 in Scandic Hotels Group on September 20, 2024 and sell it today you would earn a total of 191.00 from holding Scandic Hotels Group or generate 2.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandic Hotels Group vs. AMG Advanced Metallurgical
Performance |
| Timeline |
| Scandic Hotels Group |
| AMG Advanced Metallu |
Scandic Hotels and AMG Advanced Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and AMG Advanced
The main advantage of trading using opposite Scandic Hotels and AMG Advanced positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, AMG Advanced 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 AMG Advanced will offset losses from the drop in AMG Advanced's long position.| Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Hyundai Motor | Scandic Hotels vs. Reliance Industries Ltd |
| AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Samsung Electronics Co | AMG Advanced vs. Hyundai Motor | AMG Advanced vs. Reliance Industries Ltd |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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