Correlation Between DICKS Sporting and InterContinental
Can any of the company-specific risk be diversified away by investing in both DICKS Sporting 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 DICKS Sporting and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between DICKS Sporting Goods and InterContinental Hotels Group, you can compare the effects of market volatilities on DICKS Sporting 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 DICKS Sporting with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of DICKS Sporting and InterContinental.
Diversification Opportunities for DICKS Sporting and InterContinental
0.53 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between DICKS and InterContinental is 0.53. Overlapping area represents the amount of risk that can be diversified away by holding DICKS Sporting Goods and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and DICKS Sporting 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 DICKS Sporting Goods 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 DICKS Sporting i.e., DICKS Sporting and InterContinental go up and down completely randomly.
Pair Corralation between DICKS Sporting and InterContinental
Assuming the 90 days horizon DICKS Sporting Goods is expected to generate 1.85 times more return on investment than InterContinental. However, DICKS Sporting is 1.85 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 0.18 per unit of risk. If you would invest 18,346 in DICKS Sporting Goods on September 13, 2024 and sell it today you would earn a total of 1,572 from holding DICKS Sporting Goods or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
DICKS Sporting Goods vs. InterContinental Hotels Group
Performance |
| Timeline |
| DICKS Sporting Goods |
| InterContinental Hotels |
DICKS Sporting and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with DICKS Sporting and InterContinental
The main advantage of trading using opposite DICKS Sporting and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if DICKS Sporting 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.| DICKS Sporting vs. Superior Plus Corp | DICKS Sporting vs. SIVERS SEMICONDUCTORS AB | DICKS Sporting vs. NorAm Drilling AS | DICKS Sporting vs. Norsk Hydro ASA |
| InterContinental vs. Hyatt Hotels | InterContinental vs. INTERCONT HOTELS | InterContinental vs. Wyndham Hotels Resorts | InterContinental vs. Choice Hotels International |
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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
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