Correlation Between Iron Mountain and InterContinental
Can any of the company-specific risk be diversified away by investing in both Iron Mountain 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 Iron Mountain and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Iron Mountain and InterContinental Hotels Group, you can compare the effects of market volatilities on Iron Mountain 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 Iron Mountain with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Iron Mountain and InterContinental.
Diversification Opportunities for Iron Mountain and InterContinental
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between Iron and InterContinental is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding Iron Mountain and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Iron Mountain 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 Iron Mountain 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 Iron Mountain i.e., Iron Mountain and InterContinental go up and down completely randomly.
Pair Corralation between Iron Mountain and InterContinental
Assuming the 90 days trading horizon Iron Mountain is expected to generate 4.24 times less return on investment than InterContinental. In addition to that, Iron Mountain is 1.95 times more volatile than InterContinental Hotels Group. It trades about 0.07 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.55 per unit of volatility. If you would invest 847,400 in InterContinental Hotels Group on September 3, 2024 and sell it today you would earn a total of 132,600 from holding InterContinental Hotels Group or generate 15.65% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Iron Mountain vs. InterContinental Hotels Group
Performance |
| Timeline |
| Iron Mountain |
| InterContinental Hotels |
Iron Mountain and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Iron Mountain and InterContinental
The main advantage of trading using opposite Iron Mountain and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Iron Mountain 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.| Iron Mountain vs. Catalyst Media Group | Iron Mountain vs. CATLIN GROUP | Iron Mountain vs. Magnora ASA | Iron Mountain vs. RTW Venture Fund |
| InterContinental vs. Rockfire Resources plc | InterContinental vs. Tlou Energy | InterContinental vs. Falcon Oil Gas | InterContinental vs. Helium One Global |
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.
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