Correlation Between Triad Group and Scandic Hotels
Can any of the company-specific risk be diversified away by investing in both Triad Group and Scandic Hotels 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 Triad Group and Scandic Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Triad Group PLC and Scandic Hotels Group, you can compare the effects of market volatilities on Triad Group and Scandic Hotels 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 Triad Group with a short position of Scandic Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Triad Group and Scandic Hotels.
Diversification Opportunities for Triad Group and Scandic Hotels
-0.1 | Correlation Coefficient |
Good diversification
The 3 months correlation between Triad and Scandic is -0.1. Overlapping area represents the amount of risk that can be diversified away by holding Triad Group PLC and Scandic Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Scandic Hotels Group and Triad Group 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 Triad Group PLC are associated (or correlated) with Scandic Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Scandic Hotels Group has no effect on the direction of Triad Group i.e., Triad Group and Scandic Hotels go up and down completely randomly.
Pair Corralation between Triad Group and Scandic Hotels
Assuming the 90 days trading horizon Triad Group PLC is expected to generate 1.25 times more return on investment than Scandic Hotels. However, Triad Group is 1.25 times more volatile than Scandic Hotels Group. It trades about 0.1 of its potential returns per unit of risk. Scandic Hotels Group is currently generating about 0.07 per unit of risk. If you would invest 10,121 in Triad Group PLC on October 13, 2024 and sell it today you would earn a total of 18,879 from holding Triad Group PLC or generate 186.53% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Triad Group PLC vs. Scandic Hotels Group
Performance |
| Timeline |
| Triad Group PLC |
| Scandic Hotels Group |
Triad Group and Scandic Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Triad Group and Scandic Hotels
The main advantage of trading using opposite Triad Group and Scandic Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Triad Group position performs unexpectedly, Scandic Hotels 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 Scandic Hotels will offset losses from the drop in Scandic Hotels' long position.| Triad Group vs. Rosslyn Data Technologies | Triad Group vs. Broadridge Financial Solutions | Triad Group vs. Various Eateries PLC | Triad Group vs. Gaztransport et Technigaz |
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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 Portfolio Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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