Correlation Between Scandic Hotels and Cellnex Telecom
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Cellnex Telecom 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 Cellnex Telecom 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 Cellnex Telecom SA, you can compare the effects of market volatilities on Scandic Hotels and Cellnex Telecom 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 Cellnex Telecom. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Cellnex Telecom.
Diversification Opportunities for Scandic Hotels and Cellnex Telecom
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scandic and Cellnex is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Cellnex Telecom SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cellnex Telecom SA 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 Cellnex Telecom. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cellnex Telecom SA has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Cellnex Telecom go up and down completely randomly.
Pair Corralation between Scandic Hotels and Cellnex Telecom
Assuming the 90 days trading horizon Scandic Hotels Group is expected to under-perform the Cellnex Telecom. But the stock apears to be less risky and, when comparing its historical volatility, Scandic Hotels Group is 2.01 times less risky than Cellnex Telecom. The stock trades about -0.17 of its potential returns per unit of risk. The Cellnex Telecom SA is currently generating about -0.04 of returns per unit of risk over similar time horizon. If you would invest 3,397 in Cellnex Telecom SA on September 4, 2024 and sell it today you would lose (57.00) from holding Cellnex Telecom SA or give up 1.68% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandic Hotels Group vs. Cellnex Telecom SA
Performance |
| Timeline |
| Scandic Hotels Group |
| Cellnex Telecom SA |
Scandic Hotels and Cellnex Telecom Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Cellnex Telecom
The main advantage of trading using opposite Scandic Hotels and Cellnex Telecom positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Cellnex Telecom 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 Cellnex Telecom will offset losses from the drop in Cellnex Telecom's 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 |
| Cellnex Telecom vs. Datalogic | Cellnex Telecom vs. Extra Space Storage | Cellnex Telecom vs. Axway Software SA | Cellnex Telecom vs. Scandic Hotels Group |
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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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