Correlation Between Scandic Hotels and Sabien Technology
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Sabien Technology 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 Sabien Technology 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 Sabien Technology Group, you can compare the effects of market volatilities on Scandic Hotels and Sabien Technology 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 Sabien Technology. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Sabien Technology.
Diversification Opportunities for Scandic Hotels and Sabien Technology
-0.84 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Scandic and Sabien is -0.84. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Sabien Technology Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sabien 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 Sabien Technology. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sabien Technology has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Sabien Technology go up and down completely randomly.
Pair Corralation between Scandic Hotels and Sabien Technology
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 0.54 times more return on investment than Sabien Technology. However, Scandic Hotels Group is 1.87 times less risky than Sabien Technology. It trades about 0.11 of its potential returns per unit of risk. Sabien Technology Group is currently generating about -0.03 per unit of risk. If you would invest 5,335 in Scandic Hotels Group on December 7, 2024 and sell it today you would earn a total of 2,833 from holding Scandic Hotels Group or generate 53.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 98.4% |
| Values | Daily Returns |
Scandic Hotels Group vs. Sabien Technology Group
Performance |
| Timeline |
| Scandic Hotels Group |
| Sabien Technology |
Scandic Hotels and Sabien Technology Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Sabien Technology
The main advantage of trading using opposite Scandic Hotels and Sabien Technology positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Sabien Technology 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 Sabien Technology will offset losses from the drop in Sabien Technology's long position.| Scandic Hotels vs. American Homes 4 | Scandic Hotels vs. bet at home AG | Scandic Hotels vs. CNH Industrial NV | Scandic Hotels vs. Cornish Metals |
| Sabien Technology vs. Pfeiffer Vacuum Technology | Sabien Technology vs. Oxford Technology 2 | Sabien Technology vs. Polar Capital Technology | Sabien Technology vs. Cizzle Biotechnology Holdings |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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