Correlation Between Scandic Hotels and Serstech

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

Diversification Opportunities for Scandic Hotels and Serstech

-0.88

Correlation Coefficient

Scandic Hotels  Serstech

Pay attention - limited upside

The 3 months correlation between Scandic and Serstech is -0.88. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Serstech AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Serstech 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 Serstech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Serstech AB has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Serstech go up and down completely randomly.

Pair Corralation between Scandic Hotels and Serstech

Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 0.46 times more return on investment than Serstech. However, Scandic Hotels Group is 2.17 times less risky than Serstech. It trades about 0.22 of its potential returns per unit of risk. Serstech AB is currently generating about -0.11 per unit of risk. If you would invest  6,987  in Scandic Hotels Group on April 22, 2025 and sell it today you would earn a total of  1,533  from holding Scandic Hotels Group or generate 21.94% return on investment over 90 days.

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

Scandic Hotels Group  vs.  Serstech AB

Scandic Hotels Group

Risk-Adjusted Performance

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in Scandic Hotels Group are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively weak basic indicators, Scandic Hotels unveiled solid returns over the last few months and may actually be approaching a breakup point.

Serstech AB

Risk-Adjusted Performance

Very Weak

Over the last 90 days Serstech AB has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of uncertain performance in the last few months, the Stock's basic indicators remain comparatively stable which may send shares a bit higher in August 2025. The newest uproar may also be a sign of mid-term up-swing for the firm private investors.

Pair Trading with Scandic Hotels and Serstech

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

The idea behind Scandic Hotels Group and Serstech AB 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.

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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 Premium Stories module to follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope.