Correlation Between INTERCONT HOTELS and PPHE HOTEL
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and PPHE HOTEL 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 PPHE HOTEL into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and PPHE HOTEL GROUP, you can compare the effects of market volatilities on INTERCONT HOTELS and PPHE HOTEL 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 PPHE HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and PPHE HOTEL.
Diversification Opportunities for INTERCONT HOTELS and PPHE HOTEL
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INTERCONT and PPHE is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and PPHE HOTEL GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PPHE HOTEL GROUP 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 PPHE HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PPHE HOTEL GROUP has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and PPHE HOTEL go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and PPHE HOTEL
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to under-perform the PPHE HOTEL. But the stock apears to be less risky and, when comparing its historical volatility, INTERCONT HOTELS is 2.41 times less risky than PPHE HOTEL. The stock trades about -0.06 of its potential returns per unit of risk. The PPHE HOTEL GROUP is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 1,580 in PPHE HOTEL GROUP on October 12, 2024 and sell it today you would earn a total of 10.00 from holding PPHE HOTEL GROUP or generate 0.63% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. PPHE HOTEL GROUP
Performance |
| Timeline |
| INTERCONT HOTELS |
| PPHE HOTEL GROUP |
INTERCONT HOTELS and PPHE HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and PPHE HOTEL
The main advantage of trading using opposite INTERCONT HOTELS and PPHE HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, PPHE HOTEL 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 PPHE HOTEL will offset losses from the drop in PPHE HOTEL's long position.| INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
| PPHE HOTEL vs. T MOBILE US | PPHE HOTEL vs. Cogent Communications Holdings | PPHE HOTEL vs. MOBILE FACTORY INC | PPHE HOTEL vs. Air Transport Services |
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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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