Correlation Between Scandic Hotels and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Schweiter Technologies 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 Schweiter Technologies 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 Schweiter Technologies AG, you can compare the effects of market volatilities on Scandic Hotels and Schweiter Technologies 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 Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Schweiter Technologies.
Diversification Opportunities for Scandic Hotels and Schweiter Technologies
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Scandic and Schweiter is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Schweiter Technologies go up and down completely randomly.
Pair Corralation between Scandic Hotels and Schweiter Technologies
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 1.01 times more return on investment than Schweiter Technologies. However, Scandic Hotels is 1.01 times more volatile than Schweiter Technologies AG. It trades about 0.08 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about -0.06 per unit of risk. If you would invest 3,384 in Scandic Hotels Group on September 4, 2024 and sell it today you would earn a total of 3,369 from holding Scandic Hotels Group or generate 99.56% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Scandic Hotels Group vs. Schweiter Technologies AG
Performance |
| Timeline |
| Scandic Hotels Group |
| Schweiter Technologies |
Scandic Hotels and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Schweiter Technologies
The main advantage of trading using opposite Scandic Hotels and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Hyundai Motor | Scandic Hotels vs. Toyota Motor Corp |
| Schweiter Technologies vs. Intermediate Capital Group | Schweiter Technologies vs. Liberty Media Corp | Schweiter Technologies vs. Cairo Communication SpA | Schweiter Technologies vs. XLMedia PLC |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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