Correlation Between Scandic Hotels and Bisichi Mining
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Bisichi 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 Bisichi 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 Bisichi Mining PLC, you can compare the effects of market volatilities on Scandic Hotels and Bisichi 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 Bisichi Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Bisichi Mining.
Diversification Opportunities for Scandic Hotels and Bisichi Mining
0.57 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scandic and Bisichi is 0.57. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Bisichi Mining PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Bisichi Mining PLC 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 Bisichi Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Bisichi Mining PLC has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Bisichi Mining go up and down completely randomly.
Pair Corralation between Scandic Hotels and Bisichi Mining
Assuming the 90 days trading horizon Scandic Hotels is expected to generate 4.09 times less return on investment than Bisichi Mining. But when comparing it to its historical volatility, Scandic Hotels Group is 2.17 times less risky than Bisichi Mining. It trades about 0.05 of its potential returns per unit of risk. Bisichi Mining PLC is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 7,728 in Bisichi Mining PLC on September 2, 2024 and sell it today you would earn a total of 3,272 from holding Bisichi Mining PLC or generate 42.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandic Hotels Group vs. Bisichi Mining PLC
Performance |
| Timeline |
| Scandic Hotels Group |
| Bisichi Mining PLC |
Scandic Hotels and Bisichi Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Bisichi Mining
The main advantage of trading using opposite Scandic Hotels and Bisichi Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Bisichi 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 Bisichi Mining will offset losses from the drop in Bisichi 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 |
| Bisichi Mining vs. The Investment | Bisichi Mining vs. Tatton Asset Management | Bisichi Mining vs. Applied Materials | Bisichi Mining vs. TR Property Investment |
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 Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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