Correlation Between Scandic Hotels and Amedeo Air
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Amedeo Air 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 Amedeo Air 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 Amedeo Air Four, you can compare the effects of market volatilities on Scandic Hotels and Amedeo Air 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 Amedeo Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Amedeo Air.
Diversification Opportunities for Scandic Hotels and Amedeo Air
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Scandic and Amedeo is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four 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 Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Amedeo Air go up and down completely randomly.
Pair Corralation between Scandic Hotels and Amedeo Air
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 1.45 times more return on investment than Amedeo Air. However, Scandic Hotels is 1.45 times more volatile than Amedeo Air Four. It trades about 0.09 of its potential returns per unit of risk. Amedeo Air Four is currently generating about 0.09 per unit of risk. If you would invest 3,124 in Scandic Hotels Group on September 25, 2024 and sell it today you would earn a total of 3,644 from holding Scandic Hotels Group or generate 116.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandic Hotels Group vs. Amedeo Air Four
Performance |
| Timeline |
| Scandic Hotels Group |
| Amedeo Air Four |
Scandic Hotels and Amedeo Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Amedeo Air
The main advantage of trading using opposite Scandic Hotels and Amedeo Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Amedeo Air 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 Amedeo Air will offset losses from the drop in Amedeo Air's long position.| Scandic Hotels vs. Uniper SE | Scandic Hotels vs. Mulberry Group PLC | Scandic Hotels vs. London Security Plc | Scandic Hotels vs. Triad Group PLC |
| Amedeo Air vs. CVR Energy | Amedeo Air vs. Viridian Therapeutics | Amedeo Air vs. Nationwide Building Society | Amedeo Air vs. Digital Realty Trust |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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