Correlation Between INTERCONT HOTELS and COMBA TELECOM
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and COMBA TELECOM 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 COMBA TELECOM into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and COMBA TELECOM SYST, you can compare the effects of market volatilities on INTERCONT HOTELS and COMBA TELECOM 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 COMBA TELECOM. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and COMBA TELECOM.
Diversification Opportunities for INTERCONT HOTELS and COMBA TELECOM
-0.68 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between INTERCONT and COMBA is -0.68. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and COMBA TELECOM SYST in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COMBA TELECOM SYST 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 COMBA TELECOM. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COMBA TELECOM SYST has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and COMBA TELECOM go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and COMBA TELECOM
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 1.76 times more return on investment than COMBA TELECOM. However, INTERCONT HOTELS is 1.76 times more volatile than COMBA TELECOM SYST. It trades about 0.23 of its potential returns per unit of risk. COMBA TELECOM SYST is currently generating about -0.21 per unit of risk. If you would invest 10,200 in INTERCONT HOTELS on September 5, 2024 and sell it today you would earn a total of 1,500 from holding INTERCONT HOTELS or generate 14.71% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
INTERCONT HOTELS vs. COMBA TELECOM SYST
Performance |
| Timeline |
| INTERCONT HOTELS |
| COMBA TELECOM SYST |
INTERCONT HOTELS and COMBA TELECOM Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and COMBA TELECOM
The main advantage of trading using opposite INTERCONT HOTELS and COMBA TELECOM positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, COMBA TELECOM 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 COMBA TELECOM will offset losses from the drop in COMBA TELECOM'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 |
| COMBA TELECOM vs. TOTAL GABON | COMBA TELECOM vs. Walgreens Boots Alliance | COMBA TELECOM vs. Peak Resources Limited |
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 Content Syndication module to quickly integrate customizable finance content to your own investment portal.
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