Correlation Between CANON MARKETING and InterContinental
Can any of the company-specific risk be diversified away by investing in both CANON MARKETING 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 CANON MARKETING and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CANON MARKETING JP and InterContinental Hotels Group, you can compare the effects of market volatilities on CANON MARKETING 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 CANON MARKETING with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of CANON MARKETING and InterContinental.
Diversification Opportunities for CANON MARKETING and InterContinental
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between CANON and InterContinental is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding CANON MARKETING JP and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and CANON MARKETING 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 CANON MARKETING JP 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 CANON MARKETING i.e., CANON MARKETING and InterContinental go up and down completely randomly.
Pair Corralation between CANON MARKETING and InterContinental
Assuming the 90 days trading horizon CANON MARKETING is expected to generate 3.16 times less return on investment than InterContinental. In addition to that, CANON MARKETING is 1.2 times more volatile than InterContinental Hotels Group. It trades about 0.09 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.36 per unit of volatility. If you would invest 11,800 in InterContinental Hotels Group on November 6, 2024 and sell it today you would earn a total of 1,100 from holding InterContinental Hotels Group or generate 9.32% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.45% |
| Values | Daily Returns |
CANON MARKETING JP vs. InterContinental Hotels Group
Performance |
| Timeline |
| CANON MARKETING JP |
| InterContinental Hotels |
CANON MARKETING and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CANON MARKETING and InterContinental
The main advantage of trading using opposite CANON MARKETING and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CANON MARKETING 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.| CANON MARKETING vs. Jacquet Metal Service | CANON MARKETING vs. FIREWEED METALS P | CANON MARKETING vs. THRACE PLASTICS | CANON MARKETING vs. China National Building |
| 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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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