Correlation Between Caseys General and InterContinental
Can any of the company-specific risk be diversified away by investing in both Caseys General 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 Caseys General and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Caseys General Stores and InterContinental Hotels Group, you can compare the effects of market volatilities on Caseys General 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 Caseys General with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Caseys General and InterContinental.
Diversification Opportunities for Caseys General and InterContinental
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Caseys and InterContinental is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Caseys General Stores and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Caseys General 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 Caseys General Stores 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 Caseys General i.e., Caseys General and InterContinental go up and down completely randomly.
Pair Corralation between Caseys General and InterContinental
Assuming the 90 days trading horizon Caseys General Stores is expected to under-perform the InterContinental. In addition to that, Caseys General is 1.6 times more volatile than InterContinental Hotels Group. It trades about -0.23 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about -0.2 per unit of volatility. If you would invest 12,100 in InterContinental Hotels Group on October 12, 2024 and sell it today you would lose (300.00) from holding InterContinental Hotels Group or give up 2.48% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Caseys General Stores vs. InterContinental Hotels Group
Performance |
| Timeline |
| Caseys General Stores |
| InterContinental Hotels |
Caseys General and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Caseys General and InterContinental
The main advantage of trading using opposite Caseys General and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Caseys General 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.| Caseys General vs. Xiwang Special Steel | Caseys General vs. ANTA SPORTS PRODUCT | Caseys General vs. Transport International Holdings | Caseys General vs. SIERRA METALS |
| InterContinental vs. PREMIER FOODS | InterContinental vs. GWILLI FOOD | InterContinental vs. CN MODERN DAIRY | InterContinental vs. Caseys General Stores |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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