Correlation Between GreenTree Hospitality and InterContinental
Can any of the company-specific risk be diversified away by investing in both GreenTree Hospitality 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 GreenTree Hospitality and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenTree Hospitality Group and InterContinental Hotels Group, you can compare the effects of market volatilities on GreenTree Hospitality 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 GreenTree Hospitality with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenTree Hospitality and InterContinental.
Diversification Opportunities for GreenTree Hospitality and InterContinental
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between GreenTree and InterContinental is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding GreenTree Hospitality Group and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and GreenTree Hospitality 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 GreenTree Hospitality Group 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 GreenTree Hospitality i.e., GreenTree Hospitality and InterContinental go up and down completely randomly.
Pair Corralation between GreenTree Hospitality and InterContinental
Considering the 90-day investment horizon GreenTree Hospitality Group is expected to under-perform the InterContinental. In addition to that, GreenTree Hospitality is 1.67 times more volatile than InterContinental Hotels Group. It trades about -0.24 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.38 per unit of volatility. If you would invest 11,308 in InterContinental Hotels Group on August 28, 2024 and sell it today you would earn a total of 1,218 from holding InterContinental Hotels Group or generate 10.77% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
GreenTree Hospitality Group vs. InterContinental Hotels Group
Performance |
| Timeline |
| GreenTree Hospitality |
| InterContinental Hotels |
GreenTree Hospitality and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenTree Hospitality and InterContinental
The main advantage of trading using opposite GreenTree Hospitality and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenTree Hospitality 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.| GreenTree Hospitality vs. LuxUrban Hotels | GreenTree Hospitality vs. InterContinental Hotels Group | GreenTree Hospitality vs. Atour Lifestyle Holdings | GreenTree Hospitality vs. Huazhu Group |
| 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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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