Correlation Between Scandic Hotels and Veg Of
Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Veg Of 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 Veg Of 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 Veg of Lund, you can compare the effects of market volatilities on Scandic Hotels and Veg Of 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 Veg Of. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Veg Of.
Diversification Opportunities for Scandic Hotels and Veg Of
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Scandic and Veg is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Veg of Lund in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Veg of Lund 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 Veg Of. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Veg of Lund has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Veg Of go up and down completely randomly.
Pair Corralation between Scandic Hotels and Veg Of
Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 0.29 times more return on investment than Veg Of. However, Scandic Hotels Group is 3.46 times less risky than Veg Of. It trades about 0.08 of its potential returns per unit of risk. Veg of Lund is currently generating about -0.02 per unit of risk. If you would invest 3,530 in Scandic Hotels Group on September 4, 2024 and sell it today you would earn a total of 3,195 from holding Scandic Hotels Group or generate 90.51% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 99.79% |
| Values | Daily Returns |
Scandic Hotels Group vs. Veg of Lund
Performance |
| Timeline |
| Scandic Hotels Group |
| Veg of Lund |
Scandic Hotels and Veg Of Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Scandic Hotels and Veg Of
The main advantage of trading using opposite Scandic Hotels and Veg Of positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Veg Of 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 Veg Of will offset losses from the drop in Veg Of's long position.| Scandic Hotels vs. H M Hennes | Scandic Hotels vs. Pandox AB | Scandic Hotels vs. Norwegian Air Shuttle | Scandic Hotels vs. KABE Group AB |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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