Correlation Between Scandic Hotels and Polar Capital
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Polar Capital 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 Polar Capital 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 Polar Capital Technology, you can compare the effects of market volatilities on Scandic Hotels and Polar Capital 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 Polar Capital. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Polar Capital.
Diversification Opportunities for Scandic Hotels and Polar Capital
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between Scandic and Polar is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Polar Capital Technology in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Polar Capital Technology 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 Polar Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Polar Capital Technology has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Polar Capital go up and down completely randomly.
Pair Corralation between Scandic Hotels and Polar Capital
Assuming the 90 days trading horizon Scandic Hotels Group is expected to under-perform the Polar Capital. But the stock apears to be less risky and, when comparing its historical volatility, Scandic Hotels Group is 1.01 times less risky than Polar Capital. The stock trades about 0.0 of its potential returns per unit of risk. The Polar Capital Technology is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 29,350 in Polar Capital Technology on August 31, 2024 and sell it today you would earn a total of 4,100 from holding Polar Capital Technology or generate 13.97% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandic Hotels Group vs. Polar Capital Technology
Performance |
| Timeline |
| Scandic Hotels Group |
| Polar Capital Technology |
Scandic Hotels and Polar Capital Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Polar Capital
The main advantage of trading using opposite Scandic Hotels and Polar Capital positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Polar Capital 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 Polar Capital will offset losses from the drop in Polar Capital's long position.| Scandic Hotels vs. Molson Coors Beverage | Scandic Hotels vs. Fevertree Drinks Plc | Scandic Hotels vs. Aurora Investment Trust | Scandic Hotels vs. Smithson Investment Trust |
| Polar Capital vs. Monster Beverage Corp | Polar Capital vs. Sparebank 1 SR | Polar Capital vs. National Beverage Corp | Polar Capital vs. Taiwan Semiconductor Manufacturing |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
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