Correlation Between GreenX Metals and InterContinental
Can any of the company-specific risk be diversified away by investing in both GreenX Metals 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 GreenX Metals and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between GreenX Metals and InterContinental Hotels Group, you can compare the effects of market volatilities on GreenX Metals 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 GreenX Metals with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of GreenX Metals and InterContinental.
Diversification Opportunities for GreenX Metals and InterContinental
0.06 | Correlation Coefficient |
Significant diversification
The 3 months correlation between GreenX and InterContinental is 0.06. Overlapping area represents the amount of risk that can be diversified away by holding GreenX Metals and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and GreenX Metals 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 GreenX Metals 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 GreenX Metals i.e., GreenX Metals and InterContinental go up and down completely randomly.
Pair Corralation between GreenX Metals and InterContinental
Assuming the 90 days trading horizon GreenX Metals is expected to generate 2.27 times less return on investment than InterContinental. In addition to that, GreenX Metals is 2.59 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 0.13 per unit of volatility. If you would invest 455,087 in InterContinental Hotels Group on August 28, 2024 and sell it today you would earn a total of 524,913 from holding InterContinental Hotels Group or generate 115.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
GreenX Metals vs. InterContinental Hotels Group
Performance |
| Timeline |
| GreenX Metals |
| InterContinental Hotels |
GreenX Metals and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with GreenX Metals and InterContinental
The main advantage of trading using opposite GreenX Metals and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GreenX Metals 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.| GreenX Metals vs. Givaudan SA | GreenX Metals vs. Antofagasta PLC | GreenX Metals vs. Atalaya Mining | GreenX Metals vs. Amaroq Minerals |
| InterContinental vs. Chocoladefabriken Lindt Spruengli | InterContinental vs. National Atomic Co | InterContinental vs. OTP Bank Nyrt | InterContinental vs. Samsung Electronics Co |
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 Anywhere module to track or share privately all of your investments from the convenience of any device.
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