Correlation Between Scandic Hotels and TR Property
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and TR Property 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 TR Property 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 TR Property Investment, you can compare the effects of market volatilities on Scandic Hotels and TR Property 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 TR Property. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and TR Property.
Diversification Opportunities for Scandic Hotels and TR Property
0.28 | Correlation Coefficient |
Modest diversification
The 3 months correlation between Scandic and TRY is 0.28. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and TR Property Investment in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TR Property Investment 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 TR Property. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TR Property Investment has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and TR Property go up and down completely randomly.
Pair Corralation between Scandic Hotels and TR Property
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 1.54 times more return on investment than TR Property. However, Scandic Hotels is 1.54 times more volatile than TR Property Investment. It trades about -0.03 of its potential returns per unit of risk. TR Property Investment is currently generating about -0.06 per unit of risk. If you would invest 7,030 in Scandic Hotels Group on September 13, 2024 and sell it today you would lose (77.00) from holding Scandic Hotels Group or give up 1.1% 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. TR Property Investment
Performance |
| Timeline |
| Scandic Hotels Group |
| TR Property Investment |
Scandic Hotels and TR Property Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and TR Property
The main advantage of trading using opposite Scandic Hotels and TR Property positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, TR Property 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 TR Property will offset losses from the drop in TR Property's long position.| Scandic Hotels vs. National Bank of | Scandic Hotels vs. Royal Bank of | Scandic Hotels vs. Games Workshop Group | Scandic Hotels vs. Komercni Banka |
| TR Property vs. Ryanair Holdings plc | TR Property vs. Porvair plc | TR Property vs. Associated British Foods | TR Property vs. Fair Oaks Income |
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 Idea Analyzer module to analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas.
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