Correlation Between FUTURE GAMING and InterContinental
Can any of the company-specific risk be diversified away by investing in both FUTURE GAMING 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 FUTURE GAMING and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FUTURE GAMING GRP and InterContinental Hotels Group, you can compare the effects of market volatilities on FUTURE GAMING 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 FUTURE GAMING with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of FUTURE GAMING and InterContinental.
Diversification Opportunities for FUTURE GAMING and InterContinental
-0.76 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between FUTURE and InterContinental is -0.76. Overlapping area represents the amount of risk that can be diversified away by holding FUTURE GAMING GRP and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and FUTURE GAMING 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 FUTURE GAMING GRP 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 FUTURE GAMING i.e., FUTURE GAMING and InterContinental go up and down completely randomly.
Pair Corralation between FUTURE GAMING and InterContinental
Assuming the 90 days trading horizon FUTURE GAMING is expected to generate 1.3 times less return on investment than InterContinental. In addition to that, FUTURE GAMING is 3.9 times more volatile than InterContinental Hotels Group. It trades about 0.02 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.11 per unit of volatility. If you would invest 9,390 in InterContinental Hotels Group on October 25, 2024 and sell it today you would earn a total of 3,110 from holding InterContinental Hotels Group or generate 33.12% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
FUTURE GAMING GRP vs. InterContinental Hotels Group
Performance |
| Timeline |
| FUTURE GAMING GRP |
| InterContinental Hotels |
FUTURE GAMING and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FUTURE GAMING and InterContinental
The main advantage of trading using opposite FUTURE GAMING and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FUTURE GAMING 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.| FUTURE GAMING vs. Synchrony Financial | FUTURE GAMING vs. PARKEN Sport Entertainment | FUTURE GAMING vs. Sun Life Financial | FUTURE GAMING vs. BANKINTER ADR 2007 |
| InterContinental vs. Ribbon Communications | InterContinental vs. US FOODS HOLDING | InterContinental vs. TYSON FOODS A | InterContinental vs. Chengdu PUTIAN Telecommunications |
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 Investing Opportunities module to build portfolios using our predefined set of ideas and optimize them against your investing preferences.
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