Correlation Between UNITED URBAN and InterContinental
Can any of the company-specific risk be diversified away by investing in both UNITED URBAN 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 UNITED URBAN and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between UNITED URBAN INV and InterContinental Hotels Group, you can compare the effects of market volatilities on UNITED URBAN 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 UNITED URBAN with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of UNITED URBAN and InterContinental.
Diversification Opportunities for UNITED URBAN and InterContinental
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between UNITED and InterContinental is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding UNITED URBAN INV and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and UNITED URBAN 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 UNITED URBAN INV 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 UNITED URBAN i.e., UNITED URBAN and InterContinental go up and down completely randomly.
Pair Corralation between UNITED URBAN and InterContinental
Assuming the 90 days horizon UNITED URBAN is expected to generate 3.12 times less return on investment than InterContinental. But when comparing it to its historical volatility, UNITED URBAN INV is 2.73 times less risky than InterContinental. It trades about 0.3 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.35 of returns per unit of risk over similar time horizon. If you would invest 10,100 in InterContinental Hotels Group on August 25, 2024 and sell it today you would earn a total of 1,400 from holding InterContinental Hotels Group or generate 13.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
UNITED URBAN INV vs. InterContinental Hotels Group
Performance |
| Timeline |
| UNITED URBAN INV |
| InterContinental Hotels |
UNITED URBAN and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with UNITED URBAN and InterContinental
The main advantage of trading using opposite UNITED URBAN and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if UNITED URBAN 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.| UNITED URBAN vs. Upland Software | UNITED URBAN vs. Unity Software | UNITED URBAN vs. Sterling Construction | UNITED URBAN vs. Alfa Financial Software |
| InterContinental vs. COSMOSTEEL HLDGS | InterContinental vs. Fukuyama Transporting Co | InterContinental vs. Big 5 Sporting | InterContinental vs. Transportadora de Gas |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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