Correlation Between PREMIER FOODS and InterContinental
Can any of the company-specific risk be diversified away by investing in both PREMIER FOODS 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 PREMIER FOODS and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between PREMIER FOODS and InterContinental Hotels Group, you can compare the effects of market volatilities on PREMIER FOODS 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 PREMIER FOODS with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of PREMIER FOODS and InterContinental.
Diversification Opportunities for PREMIER FOODS and InterContinental
-0.27 | Correlation Coefficient |
Very good diversification
The 3 months correlation between PREMIER and InterContinental is -0.27. Overlapping area represents the amount of risk that can be diversified away by holding PREMIER FOODS and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and PREMIER FOODS 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 PREMIER FOODS 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 PREMIER FOODS i.e., PREMIER FOODS and InterContinental go up and down completely randomly.
Pair Corralation between PREMIER FOODS and InterContinental
Assuming the 90 days trading horizon PREMIER FOODS is expected to generate 1.21 times less return on investment than InterContinental. In addition to that, PREMIER FOODS is 1.01 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 0.11 per unit of volatility. If you would invest 6,196 in InterContinental Hotels Group on October 26, 2024 and sell it today you would earn a total of 6,304 from holding InterContinental Hotels Group or generate 101.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
PREMIER FOODS vs. InterContinental Hotels Group
Performance |
| Timeline |
| PREMIER FOODS |
| InterContinental Hotels |
PREMIER FOODS and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with PREMIER FOODS and InterContinental
The main advantage of trading using opposite PREMIER FOODS and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if PREMIER FOODS 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.| PREMIER FOODS vs. Universal Display | PREMIER FOODS vs. TRAVEL LEISURE DL 01 | PREMIER FOODS vs. Playtech plc | PREMIER FOODS vs. Tower One Wireless |
| InterContinental vs. AGNC INVESTMENT | InterContinental vs. HK Electric Investments | InterContinental vs. Addus HomeCare | InterContinental vs. Haverty Furniture Companies |
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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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