Correlation Between Central Asia and InterContinental
Can any of the company-specific risk be diversified away by investing in both Central Asia 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 Central Asia and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Central Asia Metals and InterContinental Hotels Group, you can compare the effects of market volatilities on Central Asia 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 Central Asia with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Central Asia and InterContinental.
Diversification Opportunities for Central Asia and InterContinental
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Central and InterContinental is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding Central Asia Metals and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Central Asia 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 Central Asia Metals 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 Central Asia i.e., Central Asia and InterContinental go up and down completely randomly.
Pair Corralation between Central Asia and InterContinental
Assuming the 90 days trading horizon Central Asia Metals is expected to generate 2.15 times more return on investment than InterContinental. However, Central Asia is 2.15 times more volatile than InterContinental Hotels Group. It trades about 0.14 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.3 per unit of risk. If you would invest 15,140 in Central Asia Metals on October 20, 2024 and sell it today you would earn a total of 740.00 from holding Central Asia Metals or generate 4.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Central Asia Metals vs. InterContinental Hotels Group
Performance |
| Timeline |
| Central Asia Metals |
| InterContinental Hotels |
Central Asia and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Central Asia and InterContinental
The main advantage of trading using opposite Central Asia and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Central Asia 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.| Central Asia vs. InterContinental Hotels Group | Central Asia vs. Rosslyn Data Technologies | Central Asia vs. Commerzbank AG | Central Asia vs. St Galler Kantonalbank |
| InterContinental vs. bet at home AG | InterContinental vs. Roadside Real Estate | InterContinental vs. Cairn Homes PLC | InterContinental vs. Ecclesiastical Insurance Office |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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