Correlation Between Scandic Hotels and Autoliv

Can any of the company-specific risk be diversified away by investing in both Scandic Hotels and Autoliv 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 Autoliv 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 Autoliv, you can compare the effects of market volatilities on Scandic Hotels and Autoliv 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 Autoliv. Check out your portfolio center. Please also check ongoing floating volatility patterns of Scandic Hotels and Autoliv.

Diversification Opportunities for Scandic Hotels and Autoliv

0.61

Correlation Coefficient

Scandic Hotels  Autoliv

Poor diversification

The 3 months correlation between Scandic and Autoliv is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Autoliv in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Autoliv 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 Autoliv. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Autoliv has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Autoliv go up and down completely randomly.

Pair Corralation between Scandic Hotels and Autoliv

Assuming the 90 days trading horizon Scandic Hotels is expected to generate 2.12 times less return on investment than Autoliv. In addition to that, Scandic Hotels is 1.12 times more volatile than Autoliv. It trades about 0.12 of its total potential returns per unit of risk. Autoliv is currently generating about 0.28 per unit of volatility. If you would invest  87,345  in Autoliv on April 25, 2025 and sell it today you would earn a total of  23,155  from holding Autoliv or generate 26.51% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

Scandic Hotels Group  vs.  Autoliv

Scandic Hotels Group

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in Scandic Hotels Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Scandic Hotels may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Autoliv

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Autoliv are ranked lower than 21 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain basic indicators, Autoliv exhibited solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with Scandic Hotels and Autoliv

The main advantage of trading using opposite Scandic Hotels and Autoliv positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Scandic Hotels position performs unexpectedly, Autoliv 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 Autoliv will offset losses from the drop in Autoliv's long position.

The idea behind Scandic Hotels Group and Autoliv pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.