Correlation Between INTERCONT HOTELS and BE Semiconductor
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and BE Semiconductor 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 BE Semiconductor into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and BE Semiconductor Industries, you can compare the effects of market volatilities on INTERCONT HOTELS and BE Semiconductor 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 BE Semiconductor. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and BE Semiconductor.
Diversification Opportunities for INTERCONT HOTELS and BE Semiconductor
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INTERCONT and BSI is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and BE Semiconductor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on BE Semiconductor Ind 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 BE Semiconductor. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of BE Semiconductor Ind has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and BE Semiconductor go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and BE Semiconductor
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.31 times more return on investment than BE Semiconductor. However, INTERCONT HOTELS is 3.24 times less risky than BE Semiconductor. It trades about 0.23 of its potential returns per unit of risk. BE Semiconductor Industries is currently generating about -0.09 per unit of risk. If you would invest 12,000 in INTERCONT HOTELS on November 4, 2024 and sell it today you would earn a total of 700.00 from holding INTERCONT HOTELS or generate 5.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
INTERCONT HOTELS vs. BE Semiconductor Industries
Performance |
| Timeline |
| INTERCONT HOTELS |
| BE Semiconductor Ind |
INTERCONT HOTELS and BE Semiconductor Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and BE Semiconductor
The main advantage of trading using opposite INTERCONT HOTELS and BE Semiconductor positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, BE Semiconductor 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 BE Semiconductor will offset losses from the drop in BE Semiconductor's long position.| INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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