Correlation Between INTERCONT HOTELS and BRAEMAR HOTELS
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and BRAEMAR HOTELS 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 BRAEMAR HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and BRAEMAR HOTELS RES, you can compare the effects of market volatilities on INTERCONT HOTELS and BRAEMAR HOTELS 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 BRAEMAR HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and BRAEMAR HOTELS.
Diversification Opportunities for INTERCONT HOTELS and BRAEMAR HOTELS
0.52 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INTERCONT and BRAEMAR is 0.52. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and BRAEMAR HOTELS RES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BRAEMAR HOTELS RES 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 BRAEMAR HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BRAEMAR HOTELS RES has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and BRAEMAR HOTELS go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and BRAEMAR HOTELS
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.35 times more return on investment than BRAEMAR HOTELS. However, INTERCONT HOTELS is 2.88 times less risky than BRAEMAR HOTELS. It trades about 0.13 of its potential returns per unit of risk. BRAEMAR HOTELS RES is currently generating about -0.02 per unit of risk. If you would invest 9,343 in INTERCONT HOTELS on October 25, 2024 and sell it today you would earn a total of 2,857 from holding INTERCONT HOTELS or generate 30.58% 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. BRAEMAR HOTELS RES
Performance |
| Timeline |
| INTERCONT HOTELS |
| BRAEMAR HOTELS RES |
INTERCONT HOTELS and BRAEMAR HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and BRAEMAR HOTELS
The main advantage of trading using opposite INTERCONT HOTELS and BRAEMAR HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, BRAEMAR HOTELS 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 BRAEMAR HOTELS will offset losses from the drop in BRAEMAR HOTELS's long position.| INTERCONT HOTELS vs. Marriott International | INTERCONT HOTELS vs. Hilton Worldwide Holdings | INTERCONT HOTELS vs. H World Group | INTERCONT HOTELS vs. Hyatt Hotels |
| BRAEMAR HOTELS vs. Sotherly Hotels | BRAEMAR HOTELS vs. Superior Plus Corp | BRAEMAR HOTELS vs. Origin Agritech | BRAEMAR HOTELS vs. Identiv |
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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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