Correlation Between Scandic Hotels and Abrdn Property
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Abrdn Property 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 Abrdn Property 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 abrdn Property Income, you can compare the effects of market volatilities on Scandic Hotels and Abrdn Property 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 Abrdn Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Abrdn Property.
Diversification Opportunities for Scandic Hotels and Abrdn Property
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Scandic and Abrdn is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and abrdn Property Income in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on abrdn Property Income 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 Abrdn Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of abrdn Property Income has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Abrdn Property go up and down completely randomly.
Pair Corralation between Scandic Hotels and Abrdn Property
Assuming the 90 days trading horizon Scandic Hotels is expected to generate 17.93 times less return on investment than Abrdn Property. But when comparing it to its historical volatility, Scandic Hotels Group is 31.66 times less risky than Abrdn Property. It trades about 0.09 of its potential returns per unit of risk. abrdn Property Income is currently generating about 0.05 of returns per unit of risk over similar time horizon. If you would invest 4,629 in abrdn Property Income on September 12, 2024 and sell it today you would earn a total of 1,431 from holding abrdn Property Income or generate 30.91% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 99.72% |
| Values | Daily Returns |
Scandic Hotels Group vs. abrdn Property Income
Performance |
| Timeline |
| Scandic Hotels Group |
| abrdn Property Income |
Scandic Hotels and Abrdn Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Abrdn Property
The main advantage of trading using opposite Scandic Hotels and Abrdn Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Abrdn Property 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 Abrdn Property will offset losses from the drop in Abrdn Property's long position.| Scandic Hotels vs. Hong Kong Land | Scandic Hotels vs. Neometals | Scandic Hotels vs. Coor Service Management | Scandic Hotels vs. Fidelity Sustainable USD |
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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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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