Correlation Between DALATA HOTEL and Scandinavian Tobacco
Can any of the company-specific risk be diversified away by investing in both DALATA HOTEL and Scandinavian Tobacco 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 DALATA HOTEL and Scandinavian Tobacco into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DALATA HOTEL and Scandinavian Tobacco Group, you can compare the effects of market volatilities on DALATA HOTEL and Scandinavian Tobacco 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 DALATA HOTEL with a short position of Scandinavian Tobacco. Check out your portfolio center. Please also check ongoing floating volatility patterns of DALATA HOTEL and Scandinavian Tobacco.
Diversification Opportunities for DALATA HOTEL and Scandinavian Tobacco
-0.78 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between DALATA and Scandinavian is -0.78. Overlapping area represents the amount of risk that can be diversified away by holding DALATA HOTEL and Scandinavian Tobacco Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandinavian Tobacco and DALATA HOTEL 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 DALATA HOTEL are associated (or correlated) with Scandinavian Tobacco. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandinavian Tobacco has no effect on the direction of DALATA HOTEL i.e., DALATA HOTEL and Scandinavian Tobacco go up and down completely randomly.
Pair Corralation between DALATA HOTEL and Scandinavian Tobacco
Assuming the 90 days trading horizon DALATA HOTEL is expected to generate 1.34 times less return on investment than Scandinavian Tobacco. In addition to that, DALATA HOTEL is 1.24 times more volatile than Scandinavian Tobacco Group. It trades about 0.1 of its total potential returns per unit of risk. Scandinavian Tobacco Group is currently generating about 0.16 per unit of volatility. If you would invest 1,270 in Scandinavian Tobacco Group on October 16, 2024 and sell it today you would earn a total of 52.00 from holding Scandinavian Tobacco Group or generate 4.09% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DALATA HOTEL vs. Scandinavian Tobacco Group
Performance |
| Timeline |
| DALATA HOTEL |
| Scandinavian Tobacco |
DALATA HOTEL and Scandinavian Tobacco Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DALATA HOTEL and Scandinavian Tobacco
The main advantage of trading using opposite DALATA HOTEL and Scandinavian Tobacco positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DALATA HOTEL position performs unexpectedly, Scandinavian Tobacco 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 Scandinavian Tobacco will offset losses from the drop in Scandinavian Tobacco's long position.| DALATA HOTEL vs. BJs Restaurants | DALATA HOTEL vs. SLR Investment Corp | DALATA HOTEL vs. Virtus Investment Partners | DALATA HOTEL vs. MidCap Financial Investment |
| Scandinavian Tobacco vs. Choice Hotels International | Scandinavian Tobacco vs. PPHE HOTEL GROUP | Scandinavian Tobacco vs. DALATA HOTEL | Scandinavian Tobacco vs. Westinghouse Air Brake |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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