Correlation Between INTERCONT HOTELS and Ambev SA
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and Ambev SA 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 Ambev SA into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and Ambev SA, you can compare the effects of market volatilities on INTERCONT HOTELS and Ambev SA 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 Ambev SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and Ambev SA.
Diversification Opportunities for INTERCONT HOTELS and Ambev SA
-0.45 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTERCONT and Ambev is -0.45. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and Ambev SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Ambev SA 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 Ambev SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Ambev SA has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and Ambev SA go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and Ambev SA
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.81 times more return on investment than Ambev SA. However, INTERCONT HOTELS is 1.23 times less risky than Ambev SA. It trades about 0.09 of its potential returns per unit of risk. Ambev SA is currently generating about 0.0 per unit of risk. If you would invest 9,542 in INTERCONT HOTELS on October 13, 2024 and sell it today you would earn a total of 2,258 from holding INTERCONT HOTELS or generate 23.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. Ambev SA
Performance |
| Timeline |
| INTERCONT HOTELS |
| Ambev SA |
INTERCONT HOTELS and Ambev SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and Ambev SA
The main advantage of trading using opposite INTERCONT HOTELS and Ambev SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, Ambev SA 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 Ambev SA will offset losses from the drop in Ambev SA'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 |
| Ambev SA vs. INTERSHOP Communications Aktiengesellschaft | Ambev SA vs. Summit Hotel Properties | Ambev SA vs. Entravision Communications | Ambev SA vs. INTERCONT HOTELS |
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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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