Correlation Between Krispy Kreme and InterContinental
Can any of the company-specific risk be diversified away by investing in both Krispy Kreme 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 Krispy Kreme and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Krispy Kreme and InterContinental Hotels Group, you can compare the effects of market volatilities on Krispy Kreme 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 Krispy Kreme with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Krispy Kreme and InterContinental.
Diversification Opportunities for Krispy Kreme and InterContinental
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Krispy and InterContinental is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Krispy Kreme and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Krispy Kreme 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 Krispy Kreme 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 Krispy Kreme i.e., Krispy Kreme and InterContinental go up and down completely randomly.
Pair Corralation between Krispy Kreme and InterContinental
Given the investment horizon of 90 days Krispy Kreme is expected to under-perform the InterContinental. In addition to that, Krispy Kreme is 2.05 times more volatile than InterContinental Hotels Group. It trades about -0.19 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.41 per unit of volatility. If you would invest 12,492 in InterContinental Hotels Group on November 1, 2024 and sell it today you would earn a total of 1,048 from holding InterContinental Hotels Group or generate 8.39% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Krispy Kreme vs. InterContinental Hotels Group
Performance |
| Timeline |
| Krispy Kreme |
| InterContinental Hotels |
Krispy Kreme and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Krispy Kreme and InterContinental
The main advantage of trading using opposite Krispy Kreme and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Krispy Kreme 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.| Krispy Kreme vs. Natural Grocers by | Krispy Kreme vs. Sprouts Farmers Market | Krispy Kreme vs. Albertsons Companies | Krispy Kreme vs. Ingles Markets Incorporated |
| InterContinental vs. Hilton Worldwide Holdings | InterContinental vs. Marriott International | InterContinental vs. Choice Hotels International | InterContinental vs. Wyndham Hotels Resorts |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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