Correlation Between Chengdu PUTIAN and InterContinental
Can any of the company-specific risk be diversified away by investing in both Chengdu PUTIAN 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 Chengdu PUTIAN and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Chengdu PUTIAN Telecommunications and InterContinental Hotels Group, you can compare the effects of market volatilities on Chengdu PUTIAN 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 Chengdu PUTIAN with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Chengdu PUTIAN and InterContinental.
Diversification Opportunities for Chengdu PUTIAN and InterContinental
-0.18 | Correlation Coefficient |
Good diversification
The 3 months correlation between Chengdu and InterContinental is -0.18. Overlapping area represents the amount of risk that can be diversified away by holding Chengdu PUTIAN Telecommunicati and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Chengdu PUTIAN 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 Chengdu PUTIAN Telecommunications 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 Chengdu PUTIAN i.e., Chengdu PUTIAN and InterContinental go up and down completely randomly.
Pair Corralation between Chengdu PUTIAN and InterContinental
Assuming the 90 days trading horizon Chengdu PUTIAN is expected to generate 1.59 times less return on investment than InterContinental. In addition to that, Chengdu PUTIAN is 2.35 times more volatile than InterContinental Hotels Group. It trades about 0.06 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.24 per unit of volatility. If you would invest 12,000 in InterContinental Hotels Group on November 4, 2024 and sell it today you would earn a total of 800.00 from holding InterContinental Hotels Group or generate 6.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Chengdu PUTIAN Telecommunicati vs. InterContinental Hotels Group
Performance |
| Timeline |
| Chengdu PUTIAN Telec |
| InterContinental Hotels |
Chengdu PUTIAN and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Chengdu PUTIAN and InterContinental
The main advantage of trading using opposite Chengdu PUTIAN and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Chengdu PUTIAN 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.| Chengdu PUTIAN vs. Westinghouse Air Brake | Chengdu PUTIAN vs. FORWARD AIR P | Chengdu PUTIAN vs. SOGECLAIR SA INH | Chengdu PUTIAN vs. American Eagle Outfitters |
| InterContinental vs. OAKTRSPECLENDNEW | InterContinental vs. Erste Group Bank | InterContinental vs. RYU Apparel | InterContinental vs. DISTRICT METALS |
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 Risk-Return Analysis module to view associations between returns expected from investment and the risk you assume.
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