Correlation Between Scandic Hotels and Inwido AB
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Inwido AB 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 Inwido AB 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 Inwido AB, you can compare the effects of market volatilities on Scandic Hotels and Inwido AB 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 Inwido AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Inwido AB.
Diversification Opportunities for Scandic Hotels and Inwido AB
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Scandic and Inwido is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Inwido AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Inwido 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 Inwido AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Inwido AB has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Inwido AB go up and down completely randomly.
Pair Corralation between Scandic Hotels and Inwido AB
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 0.97 times more return on investment than Inwido AB. However, Scandic Hotels Group is 1.03 times less risky than Inwido AB. It trades about 0.41 of its potential returns per unit of risk. Inwido AB is currently generating about 0.31 per unit of risk. If you would invest 6,815 in Scandic Hotels Group on November 4, 2024 and sell it today you would earn a total of 915.00 from holding Scandic Hotels Group or generate 13.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandic Hotels Group vs. Inwido AB
Performance |
| Timeline |
| Scandic Hotels Group |
| Inwido AB |
Scandic Hotels and Inwido AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Inwido AB
The main advantage of trading using opposite Scandic Hotels and Inwido AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Inwido AB 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 Inwido AB will offset losses from the drop in Inwido AB's long position.| Scandic Hotels vs. H M Hennes | Scandic Hotels vs. Pandox AB | Scandic Hotels vs. Norwegian Air Shuttle | Scandic Hotels vs. Mekonomen AB |
| Inwido AB vs. Indutrade AB | Inwido AB vs. Online Brands Nordic | Inwido AB vs. USWE Sports AB | Inwido AB vs. Catena Media plc |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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