Correlation Between Scandic Hotels and Sileon AB
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Sileon 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 Sileon 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 Sileon AB, you can compare the effects of market volatilities on Scandic Hotels and Sileon 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 Sileon AB. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Sileon AB.
Diversification Opportunities for Scandic Hotels and Sileon AB
0.31 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Scandic and Sileon is 0.31. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Sileon AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sileon 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 Sileon AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sileon AB has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Sileon AB go up and down completely randomly.
Pair Corralation between Scandic Hotels and Sileon AB
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 0.3 times more return on investment than Sileon AB. However, Scandic Hotels Group is 3.35 times less risky than Sileon AB. It trades about 0.09 of its potential returns per unit of risk. Sileon AB is currently generating about -0.07 per unit of risk. If you would invest 3,180 in Scandic Hotels Group on September 27, 2024 and sell it today you would earn a total of 3,625 from holding Scandic Hotels Group or generate 113.99% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Scandic Hotels Group vs. Sileon AB
Performance |
| Timeline |
| Scandic Hotels Group |
| Sileon AB |
Scandic Hotels and Sileon AB Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Sileon AB
The main advantage of trading using opposite Scandic Hotels and Sileon AB positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Sileon 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 Sileon AB will offset losses from the drop in Sileon 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 |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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