Correlation Between Scandic Hotels and Catalyst Media
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Catalyst Media 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 Catalyst Media 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 Catalyst Media Group, you can compare the effects of market volatilities on Scandic Hotels and Catalyst Media 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 Catalyst Media. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Catalyst Media.
Diversification Opportunities for Scandic Hotels and Catalyst Media
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Scandic and Catalyst is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Catalyst Media Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Catalyst Media Group 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 Catalyst Media. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Catalyst Media Group has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Catalyst Media go up and down completely randomly.
Pair Corralation between Scandic Hotels and Catalyst Media
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 0.99 times more return on investment than Catalyst Media. However, Scandic Hotels Group is 1.01 times less risky than Catalyst Media. It trades about 0.12 of its potential returns per unit of risk. Catalyst Media Group is currently generating about -0.07 per unit of risk. If you would invest 3,103 in Scandic Hotels Group on December 7, 2024 and sell it today you would earn a total of 5,065 from holding Scandic Hotels Group or generate 163.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.79% |
| Values | Daily Returns |
Scandic Hotels Group vs. Catalyst Media Group
Performance |
| Timeline |
| Scandic Hotels Group |
| Catalyst Media Group |
Scandic Hotels and Catalyst Media Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Catalyst Media
The main advantage of trading using opposite Scandic Hotels and Catalyst Media positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Catalyst Media 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 Catalyst Media will offset losses from the drop in Catalyst Media's long position.| Scandic Hotels vs. Auto Trader Group | ||
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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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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