Correlation Between Fukuyama Transporting and InterContinental
Can any of the company-specific risk be diversified away by investing in both Fukuyama Transporting 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 Fukuyama Transporting and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Fukuyama Transporting Co and InterContinental Hotels Group, you can compare the effects of market volatilities on Fukuyama Transporting 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 Fukuyama Transporting with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Fukuyama Transporting and InterContinental.
Diversification Opportunities for Fukuyama Transporting and InterContinental
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Fukuyama and InterContinental is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Fukuyama Transporting Co and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Fukuyama Transporting 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 Fukuyama Transporting Co 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 Fukuyama Transporting i.e., Fukuyama Transporting and InterContinental go up and down completely randomly.
Pair Corralation between Fukuyama Transporting and InterContinental
Assuming the 90 days horizon Fukuyama Transporting is expected to generate 3.57 times less return on investment than InterContinental. In addition to that, Fukuyama Transporting is 1.6 times more volatile than InterContinental Hotels Group. It trades about 0.02 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.14 per unit of volatility. If you would invest 6,151 in InterContinental Hotels Group on August 28, 2024 and sell it today you would earn a total of 5,549 from holding InterContinental Hotels Group or generate 90.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 99.72% |
| Values | Daily Returns |
Fukuyama Transporting Co vs. InterContinental Hotels Group
Performance |
| Timeline |
| Fukuyama Transporting |
| InterContinental Hotels |
Fukuyama Transporting and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Fukuyama Transporting and InterContinental
The main advantage of trading using opposite Fukuyama Transporting and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Fukuyama Transporting 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.| Fukuyama Transporting vs. Gruppo Mutuionline SpA | Fukuyama Transporting vs. REVO INSURANCE SPA | Fukuyama Transporting vs. Chiba Bank | Fukuyama Transporting vs. JSC Halyk bank |
| InterContinental vs. GALENA MINING LTD | InterContinental vs. Zijin Mining Group | InterContinental vs. Gladstone Investment | InterContinental vs. PennyMac Mortgage Investment |
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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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