Correlation Between Scandic Hotels and Ferronordic
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Ferronordic 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 Scandic Hotels and Ferronordic into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Scandic Hotels Group and Ferronordic AB, you can compare the effects of market volatilities on Scandic Hotels and Ferronordic 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 Scandic Hotels with a short position of Ferronordic. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Ferronordic.
Diversification Opportunities for Scandic Hotels and Ferronordic
-0.16 | Correlation Coefficient |
Good diversification
The 3 months correlation between Scandic and Ferronordic is -0.16. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Ferronordic AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ferronordic AB and Scandic Hotels 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 Scandic Hotels Group are associated (or correlated) with Ferronordic. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ferronordic AB has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Ferronordic go up and down completely randomly.
Pair Corralation between Scandic Hotels and Ferronordic
Assuming the 90 days trading horizon Scandic Hotels Group is expected to under-perform the Ferronordic. But the stock apears to be less risky and, when comparing its historical volatility, Scandic Hotels Group is 2.33 times less risky than Ferronordic. The stock trades about -0.13 of its potential returns per unit of risk. The Ferronordic AB is currently generating about 0.09 of returns per unit of risk over similar time horizon. If you would invest 5,610 in Ferronordic AB on September 5, 2024 and sell it today you would earn a total of 210.00 from holding Ferronordic AB or generate 3.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
Scandic Hotels Group vs. Ferronordic AB
Performance |
| Timeline |
| Scandic Hotels Group |
| Ferronordic AB |
Scandic Hotels and Ferronordic Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Ferronordic
The main advantage of trading using opposite Scandic Hotels and Ferronordic positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Ferronordic 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 Ferronordic will offset losses from the drop in Ferronordic's long position.| Scandic Hotels vs. H M Hennes | Scandic Hotels vs. Norwegian Air Shuttle | Scandic Hotels vs. KABE Group AB | Scandic Hotels vs. IAR Systems Group |
| Ferronordic vs. Beowulf Mining PLC | Ferronordic vs. Scandic Hotels Group | Ferronordic vs. Indutrade AB | Ferronordic vs. MTI Investment SE |
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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Pattern Recognition Use different Pattern Recognition models to time the market across multiple global exchanges | |
| Earnings Calls Check upcoming earnings announcements updated hourly across public exchanges | |
| Portfolio File Import Quickly import all of your third-party portfolios from your local drive in csv format | |
| Technical Analysis Check basic technical indicators and analysis based on most latest market data |