Correlation Between Batm Advanced and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both Batm Advanced 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 Batm Advanced and Scandic Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Batm Advanced Communications and Scandic Hotels Group, you can compare the effects of market volatilities on Batm Advanced 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 Batm Advanced with a short position of Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Batm Advanced and Scandic Hotels.
Diversification Opportunities for Batm Advanced and Scandic Hotels
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Batm and Scandic is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding Batm Advanced Communications 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 Batm Advanced 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 Batm Advanced Communications 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 Batm Advanced i.e., Batm Advanced and Scandic Hotels go up and down completely randomly.
Pair Corralation between Batm Advanced and Scandic Hotels
Assuming the 90 days trading horizon Batm Advanced Communications is expected to under-perform the Scandic Hotels. In addition to that, Batm Advanced is 1.64 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 0.08 per unit of volatility. If you would invest 4,295 in Scandic Hotels Group on September 2, 2024 and sell it today you would earn a total of 2,427 from holding Scandic Hotels Group or generate 56.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Batm Advanced Communications vs. Scandic Hotels Group
Performance |
| Timeline |
| Batm Advanced Commun |
| Scandic Hotels Group |
Batm Advanced and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Batm Advanced and Scandic Hotels
The main advantage of trading using opposite Batm Advanced and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Batm Advanced 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.| Batm Advanced vs. Alaska Air Group | Batm Advanced vs. Delta Air Lines | Batm Advanced vs. Silvercorp Metals | Batm Advanced vs. Greenroc Mining PLC |
| Scandic Hotels vs. Oakley Capital Investments | Scandic Hotels vs. United Internet AG | Scandic Hotels vs. Waste Management | Scandic Hotels vs. Young Cos Brewery |
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 Crypto Correlations module to use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins.
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