Correlation Between Scandic Hotels and Atalaya Mining
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Atalaya Mining 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 Atalaya Mining 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 Atalaya Mining, you can compare the effects of market volatilities on Scandic Hotels and Atalaya Mining 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 Atalaya Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Atalaya Mining.
Diversification Opportunities for Scandic Hotels and Atalaya Mining
0.24 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scandic and Atalaya is 0.24. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Atalaya Mining in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Atalaya Mining 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 Atalaya Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Atalaya Mining has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Atalaya Mining go up and down completely randomly.
Pair Corralation between Scandic Hotels and Atalaya Mining
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 0.38 times more return on investment than Atalaya Mining. However, Scandic Hotels Group is 2.64 times less risky than Atalaya Mining. It trades about -0.16 of its potential returns per unit of risk. Atalaya Mining is currently generating about -0.09 per unit of risk. If you would invest 6,943 in Scandic Hotels Group on September 2, 2024 and sell it today you would lose (221.00) from holding Scandic Hotels Group or give up 3.18% 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. Atalaya Mining
Performance |
| Timeline |
| Scandic Hotels Group |
| Atalaya Mining |
Scandic Hotels and Atalaya Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Atalaya Mining
The main advantage of trading using opposite Scandic Hotels and Atalaya Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Atalaya Mining 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 Atalaya Mining will offset losses from the drop in Atalaya Mining's long position.| Scandic Hotels vs. Oakley Capital Investments | Scandic Hotels vs. United Internet AG | Scandic Hotels vs. Waste Management | Scandic Hotels vs. Young Cos Brewery |
| Atalaya Mining vs. Scandic Hotels Group | Atalaya Mining vs. Young Cos Brewery | Atalaya Mining vs. Fair Oaks Income | Atalaya Mining vs. Park Hotels Resorts |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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