Correlation Between INTERCONT HOTELS and SOFI TECHNOLOGIES
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and SOFI TECHNOLOGIES, you can compare the effects of market volatilities on INTERCONT HOTELS and SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and SOFI TECHNOLOGIES.
Diversification Opportunities for INTERCONT HOTELS and SOFI TECHNOLOGIES
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between INTERCONT and SOFI is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and SOFI TECHNOLOGIES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SOFI TECHNOLOGIES has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and SOFI TECHNOLOGIES go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and SOFI TECHNOLOGIES
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 2.78 times less return on investment than SOFI TECHNOLOGIES. But when comparing it to its historical volatility, INTERCONT HOTELS is 1.43 times less risky than SOFI TECHNOLOGIES. It trades about 0.23 of its potential returns per unit of risk. SOFI TECHNOLOGIES is currently generating about 0.44 of returns per unit of risk over similar time horizon. If you would invest 1,048 in SOFI TECHNOLOGIES on August 27, 2024 and sell it today you would earn a total of 455.00 from holding SOFI TECHNOLOGIES or generate 43.42% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. SOFI TECHNOLOGIES
Performance |
| Timeline |
| INTERCONT HOTELS |
| SOFI TECHNOLOGIES |
INTERCONT HOTELS and SOFI TECHNOLOGIES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and SOFI TECHNOLOGIES
The main advantage of trading using opposite INTERCONT HOTELS and SOFI TECHNOLOGIES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, SOFI TECHNOLOGIES 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 SOFI TECHNOLOGIES will offset losses from the drop in SOFI TECHNOLOGIES'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 |
| SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc | SOFI TECHNOLOGIES vs. Apple Inc |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Options Analysis Analyze and evaluate options and option chains as a potential hedge for your portfolios | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |