Correlation Between FPX Nickel and INTERCONT HOTELS
Can any of the company-specific risk be diversified away by investing in both FPX Nickel and INTERCONT HOTELS 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 FPX Nickel and INTERCONT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between FPX Nickel Corp and INTERCONT HOTELS, you can compare the effects of market volatilities on FPX Nickel and INTERCONT HOTELS 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 FPX Nickel with a short position of INTERCONT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of FPX Nickel and INTERCONT HOTELS.
Diversification Opportunities for FPX Nickel and INTERCONT HOTELS
-0.24 | Correlation Coefficient |
Very good diversification
The 3 months correlation between FPX and INTERCONT is -0.24. Overlapping area represents the amount of risk that can be diversified away by holding FPX Nickel Corp and INTERCONT HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERCONT HOTELS and FPX Nickel 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 FPX Nickel Corp are associated (or correlated) with INTERCONT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERCONT HOTELS has no effect on the direction of FPX Nickel i.e., FPX Nickel and INTERCONT HOTELS go up and down completely randomly.
Pair Corralation between FPX Nickel and INTERCONT HOTELS
Assuming the 90 days horizon FPX Nickel Corp is expected to under-perform the INTERCONT HOTELS. In addition to that, FPX Nickel is 1.38 times more volatile than INTERCONT HOTELS. It trades about -0.05 of its total potential returns per unit of risk. INTERCONT HOTELS is currently generating about 0.26 per unit of volatility. If you would invest 10,200 in INTERCONT HOTELS on August 31, 2024 and sell it today you would earn a total of 1,700 from holding INTERCONT HOTELS or generate 16.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 95.65% |
| Values | Daily Returns |
FPX Nickel Corp vs. INTERCONT HOTELS
Performance |
| Timeline |
| FPX Nickel Corp |
| INTERCONT HOTELS |
FPX Nickel and INTERCONT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with FPX Nickel and INTERCONT HOTELS
The main advantage of trading using opposite FPX Nickel and INTERCONT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if FPX Nickel position performs unexpectedly, INTERCONT HOTELS 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 INTERCONT HOTELS will offset losses from the drop in INTERCONT HOTELS's long position.| FPX Nickel vs. NH HOTEL GROUP | FPX Nickel vs. INTERCONT HOTELS | FPX Nickel vs. MELIA HOTELS | FPX Nickel vs. Xenia Hotels Resorts |
| INTERCONT HOTELS vs. Hilton Worldwide Holdings | INTERCONT HOTELS vs. InterContinental Hotels Group | INTERCONT HOTELS vs. ACCOR SPADR NEW |
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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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