Correlation Between Scandic Hotels and Toyota
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Toyota 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 Toyota 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 Toyota Motor Corp, you can compare the effects of market volatilities on Scandic Hotels and Toyota 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 Toyota. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Toyota.
Diversification Opportunities for Scandic Hotels and Toyota
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Scandic and Toyota is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Toyota Motor Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Toyota Motor Corp 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 Toyota. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Toyota Motor Corp has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Toyota go up and down completely randomly.
Pair Corralation between Scandic Hotels and Toyota
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 0.83 times more return on investment than Toyota. However, Scandic Hotels Group is 1.21 times less risky than Toyota. It trades about 0.07 of its potential returns per unit of risk. Toyota Motor Corp is currently generating about 0.06 per unit of risk. If you would invest 3,836 in Scandic Hotels Group on October 25, 2024 and sell it today you would earn a total of 3,249 from holding Scandic Hotels Group or generate 84.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 97.18% |
| Values | Daily Returns |
Scandic Hotels Group vs. Toyota Motor Corp
Performance |
| Timeline |
| Scandic Hotels Group |
| Toyota Motor Corp |
Scandic Hotels and Toyota Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Toyota
The main advantage of trading using opposite Scandic Hotels and Toyota positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Toyota 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 Toyota will offset losses from the drop in Toyota's long position.| Scandic Hotels vs. Toyota Motor Corp | Scandic Hotels vs. SoftBank Group Corp | Scandic Hotels vs. OTP Bank Nyrt | Scandic Hotels vs. ONEOK Inc |
| Toyota vs. DFS Furniture PLC | Toyota vs. Playtech Plc | Toyota vs. Summit Materials Cl | Toyota vs. Compagnie Plastic Omnium |
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 File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges |