Correlation Between Eastinco Mining and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both Eastinco Mining 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 Eastinco Mining and Scandic Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Eastinco Mining Exploration and Scandic Hotels Group, you can compare the effects of market volatilities on Eastinco Mining 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 Eastinco Mining with a short position of Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Eastinco Mining and Scandic Hotels.
Diversification Opportunities for Eastinco Mining and Scandic Hotels
-0.06 | Correlation Coefficient |
Good diversification
The 3 months correlation between Eastinco and Scandic is -0.06. Overlapping area represents the amount of risk that can be diversified away by holding Eastinco Mining Exploration 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 Eastinco Mining 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 Eastinco Mining Exploration 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 Eastinco Mining i.e., Eastinco Mining and Scandic Hotels go up and down completely randomly.
Pair Corralation between Eastinco Mining and Scandic Hotels
Assuming the 90 days trading horizon Eastinco Mining Exploration is expected to under-perform the Scandic Hotels. In addition to that, Eastinco Mining is 1.3 times more volatile than Scandic Hotels Group. It trades about -0.21 of its total potential returns per unit of risk. Scandic Hotels Group is currently generating about 0.12 per unit of volatility. If you would invest 6,431 in Scandic Hotels Group on September 22, 2024 and sell it today you would earn a total of 249.00 from holding Scandic Hotels Group or generate 3.87% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Eastinco Mining Exploration vs. Scandic Hotels Group
Performance |
| Timeline |
| Eastinco Mining Expl |
| Scandic Hotels Group |
Eastinco Mining and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Eastinco Mining and Scandic Hotels
The main advantage of trading using opposite Eastinco Mining and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Eastinco Mining 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.| Eastinco Mining vs. Givaudan SA | Eastinco Mining vs. Antofagasta PLC | Eastinco Mining vs. Ferrexpo PLC | Eastinco Mining vs. Atalaya Mining |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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