Correlation Between VARIOUS EATERIES and Intercontinental
Can any of the company-specific risk be diversified away by investing in both VARIOUS EATERIES 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 VARIOUS EATERIES and Intercontinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VARIOUS EATERIES LS and Intercontinental Exchange, you can compare the effects of market volatilities on VARIOUS EATERIES 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 VARIOUS EATERIES with a short position of Intercontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of VARIOUS EATERIES and Intercontinental.
Diversification Opportunities for VARIOUS EATERIES and Intercontinental
0.17 | Correlation Coefficient |
Average diversification
The 3 months correlation between VARIOUS and Intercontinental is 0.17. Overlapping area represents the amount of risk that can be diversified away by holding VARIOUS EATERIES LS and Intercontinental Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercontinental Exchange and VARIOUS EATERIES 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 VARIOUS EATERIES LS 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 Exchange has no effect on the direction of VARIOUS EATERIES i.e., VARIOUS EATERIES and Intercontinental go up and down completely randomly.
Pair Corralation between VARIOUS EATERIES and Intercontinental
Assuming the 90 days horizon VARIOUS EATERIES LS is expected to under-perform the Intercontinental. But the stock apears to be less risky and, when comparing its historical volatility, VARIOUS EATERIES LS is 1.33 times less risky than Intercontinental. The stock trades about -0.22 of its potential returns per unit of risk. The Intercontinental Exchange is currently generating about 0.2 of returns per unit of risk over similar time horizon. If you would invest 14,454 in Intercontinental Exchange on November 4, 2024 and sell it today you would earn a total of 988.00 from holding Intercontinental Exchange or generate 6.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 95.45% |
| Values | Daily Returns |
VARIOUS EATERIES LS vs. Intercontinental Exchange
Performance |
| Timeline |
| VARIOUS EATERIES |
| Intercontinental Exchange |
VARIOUS EATERIES and Intercontinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VARIOUS EATERIES and Intercontinental
The main advantage of trading using opposite VARIOUS EATERIES and Intercontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VARIOUS EATERIES 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.| VARIOUS EATERIES vs. GRUPO CARSO A1 | VARIOUS EATERIES vs. Transport International Holdings | VARIOUS EATERIES vs. GigaMedia | VARIOUS EATERIES vs. GEELY AUTOMOBILE |
| Intercontinental vs. US FOODS HOLDING | Intercontinental vs. Thai Beverage Public | Intercontinental vs. TYSON FOODS A | Intercontinental vs. PREMIER FOODS |
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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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