Correlation Between Dairy Farm and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both Dairy Farm 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 Dairy Farm and Scandic Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Dairy Farm International and Scandic Hotels Group, you can compare the effects of market volatilities on Dairy Farm 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 Dairy Farm with a short position of Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Dairy Farm and Scandic Hotels.
Diversification Opportunities for Dairy Farm and Scandic Hotels
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Dairy and Scandic is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding Dairy Farm International 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 Dairy Farm 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 Dairy Farm International 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 Dairy Farm i.e., Dairy Farm and Scandic Hotels go up and down completely randomly.
Pair Corralation between Dairy Farm and Scandic Hotels
If you would invest 7,756 in Scandic Hotels Group on December 6, 2024 and sell it today you would earn a total of 577.00 from holding Scandic Hotels Group or generate 7.44% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Flat |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
Dairy Farm International vs. Scandic Hotels Group
Performance |
| Timeline |
| Dairy Farm International |
| Scandic Hotels Group |
Dairy Farm and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Dairy Farm and Scandic Hotels
The main advantage of trading using opposite Dairy Farm and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Dairy Farm 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.| Dairy Farm vs. Light Science Technologies | ||
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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