Correlation Between St Galler and InterContinental
Can any of the company-specific risk be diversified away by investing in both St Galler 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 St Galler and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between St Galler Kantonalbank and InterContinental Hotels Group, you can compare the effects of market volatilities on St Galler 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 St Galler with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of St Galler and InterContinental.
Diversification Opportunities for St Galler and InterContinental
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between 0QQZ and InterContinental is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding St Galler Kantonalbank and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and St Galler 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 St Galler Kantonalbank 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 St Galler i.e., St Galler and InterContinental go up and down completely randomly.
Pair Corralation between St Galler and InterContinental
Assuming the 90 days trading horizon St Galler is expected to generate 10.26 times less return on investment than InterContinental. But when comparing it to its historical volatility, St Galler Kantonalbank is 2.33 times less risky than InterContinental. It trades about 0.11 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.47 of returns per unit of risk over similar time horizon. If you would invest 856,200 in InterContinental Hotels Group on September 1, 2024 and sell it today you would earn a total of 123,800 from holding InterContinental Hotels Group or generate 14.46% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
St Galler Kantonalbank vs. InterContinental Hotels Group
Performance |
| Timeline |
| St Galler Kantonalbank |
| InterContinental Hotels |
St Galler and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with St Galler and InterContinental
The main advantage of trading using opposite St Galler and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if St Galler 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.| St Galler vs. Uniper SE | St Galler vs. Mulberry Group PLC | St Galler vs. London Security Plc | St Galler vs. Triad Group PLC |
| InterContinental vs. FC Investment Trust | InterContinental vs. Ross Stores | InterContinental vs. Monks Investment Trust | InterContinental vs. The Mercantile 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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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