Correlation Between INTERCONT HOTELS and Knowles
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and Knowles 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 INTERCONT HOTELS and Knowles into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and Knowles, you can compare the effects of market volatilities on INTERCONT HOTELS and Knowles 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 INTERCONT HOTELS with a short position of Knowles. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and Knowles.
Diversification Opportunities for INTERCONT HOTELS and Knowles
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INTERCONT and Knowles is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and Knowles in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Knowles and INTERCONT HOTELS 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 INTERCONT HOTELS are associated (or correlated) with Knowles. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Knowles has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and Knowles go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and Knowles
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 1.21 times more return on investment than Knowles. However, INTERCONT HOTELS is 1.21 times more volatile than Knowles. It trades about 0.25 of its potential returns per unit of risk. Knowles is currently generating about 0.26 per unit of risk. If you would invest 10,200 in INTERCONT HOTELS on September 1, 2024 and sell it today you would earn a total of 1,600 from holding INTERCONT HOTELS or generate 15.69% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 95.65% |
| Values | Daily Returns |
INTERCONT HOTELS vs. Knowles
Performance |
| Timeline |
| INTERCONT HOTELS |
| Knowles |
INTERCONT HOTELS and Knowles Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and Knowles
The main advantage of trading using opposite INTERCONT HOTELS and Knowles positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, Knowles 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 Knowles will offset losses from the drop in Knowles' long position.| INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
| Knowles vs. ULTRA CLEAN HLDGS | Knowles vs. INTERCONT HOTELS | Knowles vs. Xenia Hotels Resorts | Knowles vs. Luckin Coffee |
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 CEOs Directory module to screen CEOs from public companies around the world.
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