Correlation Between INTERCONT HOTELS and COVIVIO HOTELS
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and COVIVIO 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 COVIVIO 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 COVIVIO HOTELS INH, you can compare the effects of market volatilities on INTERCONT HOTELS and COVIVIO 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 COVIVIO HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and COVIVIO HOTELS.
Diversification Opportunities for INTERCONT HOTELS and COVIVIO HOTELS
0.19 | Correlation Coefficient |
Average diversification
The 3 months correlation between INTERCONT and COVIVIO is 0.19. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and COVIVIO HOTELS INH in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COVIVIO HOTELS INH 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 COVIVIO HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COVIVIO HOTELS INH has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and COVIVIO HOTELS go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and COVIVIO HOTELS
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 1.45 times more return on investment than COVIVIO HOTELS. However, INTERCONT HOTELS is 1.45 times more volatile than COVIVIO HOTELS INH. It trades about 0.21 of its potential returns per unit of risk. COVIVIO HOTELS INH is currently generating about 0.05 per unit of risk. If you would invest 8,946 in INTERCONT HOTELS on August 28, 2024 and sell it today you would earn a total of 2,654 from holding INTERCONT HOTELS or generate 29.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. COVIVIO HOTELS INH
Performance |
| Timeline |
| INTERCONT HOTELS |
| COVIVIO HOTELS INH |
INTERCONT HOTELS and COVIVIO HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and COVIVIO HOTELS
The main advantage of trading using opposite INTERCONT HOTELS and COVIVIO HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, COVIVIO 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 COVIVIO HOTELS will offset losses from the drop in COVIVIO HOTELS'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 |
| COVIVIO HOTELS vs. PARKEN Sport Entertainment | COVIVIO HOTELS vs. IDP EDUCATION LTD | COVIVIO HOTELS vs. Xinhua Winshare Publishing | COVIVIO HOTELS vs. DeVry Education Group |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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