Correlation Between USWE SPORTS and InterContinental
Can any of the company-specific risk be diversified away by investing in both USWE SPORTS 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 USWE SPORTS and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between USWE SPORTS AB and InterContinental Hotels Group, you can compare the effects of market volatilities on USWE SPORTS 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 USWE SPORTS with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of USWE SPORTS and InterContinental.
Diversification Opportunities for USWE SPORTS and InterContinental
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between USWE and InterContinental is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding USWE SPORTS AB and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and USWE SPORTS 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 USWE SPORTS AB 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 USWE SPORTS i.e., USWE SPORTS and InterContinental go up and down completely randomly.
Pair Corralation between USWE SPORTS and InterContinental
Assuming the 90 days horizon USWE SPORTS AB is expected to under-perform the InterContinental. In addition to that, USWE SPORTS is 1.51 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 -0.08 per unit of volatility. If you would invest 12,400 in InterContinental Hotels Group on November 27, 2024 and sell it today you would lose (400.00) from holding InterContinental Hotels Group or give up 3.23% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
USWE SPORTS AB vs. InterContinental Hotels Group
Performance |
| Timeline |
| USWE SPORTS AB |
| InterContinental Hotels |
USWE SPORTS and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with USWE SPORTS and InterContinental
The main advantage of trading using opposite USWE SPORTS and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if USWE SPORTS 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.| USWE SPORTS vs. SmarTone Telecommunications Holdings | USWE SPORTS vs. 24SEVENOFFICE GROUP AB | USWE SPORTS vs. Hisense Home Appliances | USWE SPORTS vs. Ultra Clean Holdings |
| InterContinental vs. CVR Medical Corp | InterContinental vs. VIVA WINE GROUP | InterContinental vs. ONWARD MEDICAL BV | InterContinental vs. Geratherm Medical AG |
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 Portfolio File Import module to quickly import all of your third-party portfolios from your local drive in csv format.
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