Correlation Between Scandic Hotels and Volati AB

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

Diversification Opportunities for Scandic Hotels and Volati AB

0.84

Correlation Coefficient

Scandic Hotels  Volati AB

Very poor diversification

The 3 months correlation between Scandic and Volati is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding Scandic Hotels Group and Volati AB in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Volati 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 Volati AB. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Volati AB has no effect on the direction of Scandic Hotels i.e., Scandic Hotels and Volati AB go up and down completely randomly.

Pair Corralation between Scandic Hotels and Volati AB

Assuming the 90 days trading horizon Scandic Hotels Group is expected to generate 5.0 times more return on investment than Volati AB. However, Scandic Hotels is 5.0 times more volatile than Volati AB. It trades about 0.12 of its potential returns per unit of risk. Volati AB is currently generating about 0.18 per unit of risk. If you would invest  7,282  in Scandic Hotels Group on April 25, 2025 and sell it today you would earn a total of  818.00  from holding Scandic Hotels Group or generate 11.23% return on investment over 90 days.

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

Scandic Hotels Group  vs.  Volati AB

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.

Volati AB

Risk-Adjusted Performance

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Volati AB are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Volati AB is not utilizing all of its potentials. The current stock price agitation, may contribute to short-term losses for the retail investors.

Pair Trading with Scandic Hotels and Volati AB

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

The idea behind Scandic Hotels Group and Volati 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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.