Correlation Between CN MODERN and InterContinental
Can any of the company-specific risk be diversified away by investing in both CN MODERN and InterContinental 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 CN MODERN and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CN MODERN DAIRY and InterContinental Hotels Group, you can compare the effects of market volatilities on CN MODERN and InterContinental 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 CN MODERN with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of CN MODERN and InterContinental.
Diversification Opportunities for CN MODERN and InterContinental
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between 07M and InterContinental is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding CN MODERN DAIRY and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and CN MODERN 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 CN MODERN DAIRY are associated (or correlated) with InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of CN MODERN i.e., CN MODERN and InterContinental go up and down completely randomly.
Pair Corralation between CN MODERN and InterContinental
Assuming the 90 days trading horizon CN MODERN DAIRY is expected to generate 7.94 times more return on investment than InterContinental. However, CN MODERN is 7.94 times more volatile than InterContinental Hotels Group. It trades about 0.02 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about -0.2 per unit of risk. If you would invest 10.00 in CN MODERN DAIRY on October 12, 2024 and sell it today you would lose (0.05) from holding CN MODERN DAIRY or give up 0.5% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CN MODERN DAIRY vs. InterContinental Hotels Group
Performance |
| Timeline |
| CN MODERN DAIRY |
| InterContinental Hotels |
CN MODERN and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CN MODERN and InterContinental
The main advantage of trading using opposite CN MODERN and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CN MODERN position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental's long position.| CN MODERN vs. CITY OFFICE REIT | CN MODERN vs. ANTA SPORTS PRODUCT | CN MODERN vs. SPORT LISBOA E | CN MODERN vs. SOEDER SPORTFISKE AB |
| InterContinental vs. PREMIER FOODS | InterContinental vs. GWILLI FOOD | InterContinental vs. CN MODERN DAIRY | InterContinental vs. Caseys General Stores |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
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