Correlation Between NH HOTEL and SCANDION ONC
Can any of the company-specific risk be diversified away by investing in both NH HOTEL and SCANDION ONC 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 NH HOTEL and SCANDION ONC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between NH HOTEL GROUP and SCANDION ONC DK 0735, you can compare the effects of market volatilities on NH HOTEL and SCANDION ONC 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 NH HOTEL with a short position of SCANDION ONC. Check out your portfolio center. Please also check ongoing floating volatility patterns of NH HOTEL and SCANDION ONC.
Diversification Opportunities for NH HOTEL and SCANDION ONC
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between NH5 and SCANDION is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding NH HOTEL GROUP and SCANDION ONC DK 0735 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SCANDION ONC DK and NH 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 NH HOTEL GROUP are associated (or correlated) with SCANDION ONC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SCANDION ONC DK has no effect on the direction of NH HOTEL i.e., NH HOTEL and SCANDION ONC go up and down completely randomly.
Pair Corralation between NH HOTEL and SCANDION ONC
Assuming the 90 days trading horizon NH HOTEL is expected to generate 1.14 times less return on investment than SCANDION ONC. But when comparing it to its historical volatility, NH HOTEL GROUP is 6.23 times less risky than SCANDION ONC. It trades about 0.03 of its potential returns per unit of risk. SCANDION ONC DK 0735 is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 12.00 in SCANDION ONC DK 0735 on September 3, 2024 and sell it today you would lose (11.40) from holding SCANDION ONC DK 0735 or give up 95.0% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
NH HOTEL GROUP vs. SCANDION ONC DK 0735
Performance |
| Timeline |
| NH HOTEL GROUP |
| SCANDION ONC DK |
NH HOTEL and SCANDION ONC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with NH HOTEL and SCANDION ONC
The main advantage of trading using opposite NH HOTEL and SCANDION ONC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if NH HOTEL position performs unexpectedly, SCANDION ONC 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 SCANDION ONC will offset losses from the drop in SCANDION ONC's long position.The idea behind NH HOTEL GROUP and SCANDION ONC DK 0735 pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| SCANDION ONC vs. CDL INVESTMENT | SCANDION ONC vs. NH HOTEL GROUP | SCANDION ONC vs. MGIC INVESTMENT | SCANDION ONC vs. HK Electric Investments |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Equity Analysis Research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Aroon Oscillator Analyze current equity momentum using Aroon Oscillator and other momentum ratios | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |