Correlation Between Diversified Energy and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both Diversified Energy 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 Diversified Energy and Scandic Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Diversified Energy and Scandic Hotels Group, you can compare the effects of market volatilities on Diversified Energy 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 Diversified Energy with a short position of Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Diversified Energy and Scandic Hotels.
Diversification Opportunities for Diversified Energy and Scandic Hotels
-0.57 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Diversified and Scandic is -0.57. Overlapping area represents the amount of risk that can be diversified away by holding Diversified Energy 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 Diversified Energy 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 Diversified Energy 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 Diversified Energy i.e., Diversified Energy and Scandic Hotels go up and down completely randomly.
Pair Corralation between Diversified Energy and Scandic Hotels
Assuming the 90 days trading horizon Diversified Energy is expected to generate 1.28 times more return on investment than Scandic Hotels. However, Diversified Energy is 1.28 times more volatile than Scandic Hotels Group. It trades about 0.34 of its potential returns per unit of risk. Scandic Hotels Group is currently generating about 0.15 per unit of risk. If you would invest 118,300 in Diversified Energy on October 20, 2024 and sell it today you would earn a total of 16,000 from holding Diversified Energy or generate 13.52% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Diversified Energy vs. Scandic Hotels Group
Performance |
| Timeline |
| Diversified Energy |
| Scandic Hotels Group |
Diversified Energy and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Diversified Energy and Scandic Hotels
The main advantage of trading using opposite Diversified Energy and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Diversified Energy 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.| Diversified Energy vs. Micron Technology | Diversified Energy vs. Aptitude Software Group | Diversified Energy vs. Waste Management | Diversified Energy vs. Take Two Interactive Software |
| Scandic Hotels vs. Bankers Investment Trust | Scandic Hotels vs. Caledonia Investments | Scandic Hotels vs. New Residential Investment | Scandic Hotels vs. FC Investment Trust |
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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Crypto Correlations Use cryptocurrency correlation module to diversify your cryptocurrency portfolio across multiple coins | |
| Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Commodity Directory Find actively traded commodities issued by global exchanges | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios |