Correlation Between Align Technology and InterContinental
Can any of the company-specific risk be diversified away by investing in both Align Technology 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 Align Technology and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Align Technology and InterContinental Hotels Group, you can compare the effects of market volatilities on Align Technology 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 Align Technology with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Align Technology and InterContinental.
Diversification Opportunities for Align Technology and InterContinental
-0.12 | Correlation Coefficient |
Good diversification
The 3 months correlation between Align and InterContinental is -0.12. Overlapping area represents the amount of risk that can be diversified away by holding Align Technology and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Align Technology 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 Align Technology 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 Align Technology i.e., Align Technology and InterContinental go up and down completely randomly.
Pair Corralation between Align Technology and InterContinental
Assuming the 90 days horizon Align Technology is expected to under-perform the InterContinental. In addition to that, Align Technology is 1.15 times more volatile than InterContinental Hotels Group. It trades about -0.41 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about -0.14 per unit of volatility. If you would invest 12,400 in InterContinental Hotels Group on November 28, 2024 and sell it today you would lose (700.00) from holding InterContinental Hotels Group or give up 5.65% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Align Technology vs. InterContinental Hotels Group
Performance |
| Timeline |
| Align Technology |
| InterContinental Hotels |
Align Technology and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Align Technology and InterContinental
The main advantage of trading using opposite Align Technology and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Align Technology 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.| Align Technology vs. Data3 Limited | Align Technology vs. BII Railway Transportation | Align Technology vs. Kaufman Broad SA | Align Technology vs. Fukuyama Transporting Co |
| InterContinental vs. CLOVER HEALTH INV | InterContinental vs. SYSTEMAIR AB | InterContinental vs. Japan Tobacco | InterContinental vs. OPKO HEALTH |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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