Correlation Between Vitec Software and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both Vitec Software and Scandic Hotels 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 Vitec Software and Scandic Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vitec Software Group and Scandic Hotels Group, you can compare the effects of market volatilities on Vitec Software and Scandic Hotels 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 Vitec Software with a short position of Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vitec Software and Scandic Hotels.
Diversification Opportunities for Vitec Software and Scandic Hotels
-0.22 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Vitec and Scandic is -0.22. Overlapping area represents the amount of risk that can be diversified away by holding Vitec Software Group and Scandic Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandic Hotels Group and Vitec Software 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 Vitec Software Group are associated (or correlated) with Scandic Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandic Hotels Group has no effect on the direction of Vitec Software i.e., Vitec Software and Scandic Hotels go up and down completely randomly.
Pair Corralation between Vitec Software and Scandic Hotels
Assuming the 90 days trading horizon Vitec Software is expected to generate 2.91 times less return on investment than Scandic Hotels. In addition to that, Vitec Software is 1.06 times more volatile than Scandic Hotels Group. It trades about 0.03 of its total potential returns per unit of risk. Scandic Hotels Group is currently generating about 0.09 per unit of volatility. If you would invest 3,083 in Scandic Hotels Group on September 19, 2024 and sell it today you would earn a total of 3,625 from holding Scandic Hotels Group or generate 117.58% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.21% |
| Values | Daily Returns |
Vitec Software Group vs. Scandic Hotels Group
Performance |
| Timeline |
| Vitec Software Group |
| Scandic Hotels Group |
Vitec Software and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Vitec Software and Scandic Hotels
The main advantage of trading using opposite Vitec Software and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vitec Software position performs unexpectedly, Scandic Hotels 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 Scandic Hotels will offset losses from the drop in Scandic Hotels' long position.| Vitec Software vs. Samsung Electronics Co | Vitec Software vs. Samsung Electronics Co | Vitec Software vs. Hyundai Motor | Vitec Software vs. Reliance Industries Ltd |
| Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Hyundai Motor | Scandic Hotels vs. Reliance Industries Ltd |
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 Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
Other Complementary Tools
| Odds Of Bankruptcy Get analysis of equity chance of financial distress in the next 2 years | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |