Correlation Between Anglo Asian and InterContinental
Can any of the company-specific risk be diversified away by investing in both Anglo Asian 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 Anglo Asian and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Anglo Asian Mining and InterContinental Hotels Group, you can compare the effects of market volatilities on Anglo Asian 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 Anglo Asian with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Anglo Asian and InterContinental.
Diversification Opportunities for Anglo Asian and InterContinental
-0.73 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Anglo and InterContinental is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding Anglo Asian Mining and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Anglo Asian 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 Anglo Asian Mining 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 Anglo Asian i.e., Anglo Asian and InterContinental go up and down completely randomly.
Pair Corralation between Anglo Asian and InterContinental
Assuming the 90 days trading horizon Anglo Asian Mining is expected to generate 2.64 times more return on investment than InterContinental. However, Anglo Asian is 2.64 times more volatile than InterContinental Hotels Group. It trades about 0.12 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.03 per unit of risk. If you would invest 10,500 in Anglo Asian Mining on October 13, 2024 and sell it today you would earn a total of 500.00 from holding Anglo Asian Mining or generate 4.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Anglo Asian Mining vs. InterContinental Hotels Group
Performance |
| Timeline |
| Anglo Asian Mining |
| InterContinental Hotels |
Anglo Asian and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Anglo Asian and InterContinental
The main advantage of trading using opposite Anglo Asian and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Anglo Asian 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.| Anglo Asian vs. Batm Advanced Communications | Anglo Asian vs. Gamma Communications PLC | Anglo Asian vs. Molson Coors Beverage | Anglo Asian vs. InterContinental Hotels Group |
| InterContinental vs. Anglo Asian Mining | InterContinental vs. Beowulf Mining | InterContinental vs. United Utilities Group | InterContinental vs. Eastinco Mining Exploration |
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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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