Correlation Between Cboe UK and InterContinental
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By analyzing existing cross correlation between Cboe UK Consumer and InterContinental Hotels Group, you can compare the effects of market volatilities on Cboe UK 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 Cboe UK with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Cboe UK and InterContinental.
Diversification Opportunities for Cboe UK and InterContinental
0.98 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Cboe and InterContinental is 0.98. Overlapping area represents the amount of risk that can be diversified away by holding Cboe UK Consumer and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Cboe UK 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 Cboe UK Consumer 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 Cboe UK i.e., Cboe UK and InterContinental go up and down completely randomly.
Pair Corralation between Cboe UK and InterContinental
Assuming the 90 days trading horizon Cboe UK is expected to generate 1.95 times less return on investment than InterContinental. But when comparing it to its historical volatility, Cboe UK Consumer is 1.28 times less risky than InterContinental. It trades about 0.08 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.12 of returns per unit of risk over similar time horizon. If you would invest 486,877 in InterContinental Hotels Group on August 28, 2024 and sell it today you would earn a total of 493,123 from holding InterContinental Hotels Group or generate 101.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 98.56% |
| Values | Daily Returns |
Cboe UK Consumer vs. InterContinental Hotels Group
Performance |
| Timeline |
Cboe UK and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Cboe UK Consumer
Pair trading matchups for Cboe UK
InterContinental Hotels Group
Pair trading matchups for InterContinental
Pair Trading with Cboe UK and InterContinental
The main advantage of trading using opposite Cboe UK and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Cboe UK 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.| Cboe UK vs. Skandinaviska Enskilda Banken | Cboe UK vs. Arrow Electronics | Cboe UK vs. Qurate Retail Series | Cboe UK vs. Alior Bank SA |
| InterContinental vs. PPHE Hotel Group | InterContinental vs. Axfood AB | InterContinental vs. Sligro Food Group | InterContinental vs. Team Internet Group |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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