Correlation Between Endeavour Mining and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both Endeavour 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 Endeavour 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 Endeavour Mining Corp and Scandic Hotels Group, you can compare the effects of market volatilities on Endeavour 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 Endeavour Mining with a short position of Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Endeavour Mining and Scandic Hotels.
Diversification Opportunities for Endeavour Mining and Scandic Hotels
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Endeavour and Scandic is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding Endeavour Mining Corp 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 Endeavour 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 Endeavour Mining Corp 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 Endeavour Mining i.e., Endeavour Mining and Scandic Hotels go up and down completely randomly.
Pair Corralation between Endeavour Mining and Scandic Hotels
Assuming the 90 days trading horizon Endeavour Mining is expected to generate 25.88 times less return on investment than Scandic Hotels. In addition to that, Endeavour Mining is 1.13 times more volatile than Scandic Hotels Group. It trades about 0.0 of its total potential returns per unit of risk. Scandic Hotels Group is currently generating about 0.09 per unit of volatility. If you would invest 3,116 in Scandic Hotels Group on September 20, 2024 and sell it today you would earn a total of 3,592 from holding Scandic Hotels Group or generate 115.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.6% |
| Values | Daily Returns |
Endeavour Mining Corp vs. Scandic Hotels Group
Performance |
| Timeline |
| Endeavour Mining Corp |
| Scandic Hotels Group |
Endeavour Mining and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Endeavour Mining and Scandic Hotels
The main advantage of trading using opposite Endeavour Mining and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Endeavour 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.| Endeavour Mining vs. Future Metals NL | Endeavour Mining vs. Westlake Chemical Corp | Endeavour Mining vs. GreenX Metals | Endeavour Mining vs. National Beverage Corp |
| Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Samsung Electronics Co | Scandic Hotels vs. Hyundai Motor | Scandic Hotels vs. Reliance Industries Ltd |
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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.
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