Correlation Between MTY Food and InterContinental
Can any of the company-specific risk be diversified away by investing in both MTY Food 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 MTY Food and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MTY Food Group and InterContinental Hotels Group, you can compare the effects of market volatilities on MTY Food 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 MTY Food with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of MTY Food and InterContinental.
Diversification Opportunities for MTY Food and InterContinental
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between MTY and InterContinental is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding MTY Food Group and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and MTY Food 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 MTY Food Group 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 MTY Food i.e., MTY Food and InterContinental go up and down completely randomly.
Pair Corralation between MTY Food and InterContinental
Assuming the 90 days horizon MTY Food Group is expected to under-perform the InterContinental. In addition to that, MTY Food is 1.3 times more volatile than InterContinental Hotels Group. It trades about -0.03 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.12 per unit of volatility. If you would invest 6,100 in InterContinental Hotels Group on November 7, 2024 and sell it today you would earn a total of 6,800 from holding InterContinental Hotels Group or generate 111.48% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
MTY Food Group vs. InterContinental Hotels Group
Performance |
| Timeline |
| MTY Food Group |
| InterContinental Hotels |
MTY Food and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MTY Food and InterContinental
The main advantage of trading using opposite MTY Food and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MTY Food 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.| MTY Food vs. SINGAPORE AIRLINES | MTY Food vs. BOS BETTER ONLINE | MTY Food vs. Salesforce | MTY Food vs. SALESFORCE INC CDR |
| InterContinental vs. SBM OFFSHORE | InterContinental vs. Singapore Telecommunications Limited | InterContinental vs. TITAN MACHINERY | InterContinental vs. AGRICULTBK HADR25 YC |
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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