Correlation Between INTERCONT HOTELS and Accenture Plc
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and Accenture Plc 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 Accenture Plc into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and Accenture plc, you can compare the effects of market volatilities on INTERCONT HOTELS and Accenture Plc 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 Accenture Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and Accenture Plc.
Diversification Opportunities for INTERCONT HOTELS and Accenture Plc
0.75 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INTERCONT and Accenture is 0.75. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and Accenture plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accenture plc 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 Accenture Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accenture plc has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and Accenture Plc go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and Accenture Plc
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 1.46 times less return on investment than Accenture Plc. But when comparing it to its historical volatility, INTERCONT HOTELS is 1.18 times less risky than Accenture Plc. It trades about 0.22 of its potential returns per unit of risk. Accenture plc is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 33,703 in Accenture plc on November 3, 2024 and sell it today you would earn a total of 3,042 from holding Accenture plc or generate 9.03% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
INTERCONT HOTELS vs. Accenture plc
Performance |
| Timeline |
| INTERCONT HOTELS |
| Accenture plc |
INTERCONT HOTELS and Accenture Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and Accenture Plc
The main advantage of trading using opposite INTERCONT HOTELS and Accenture Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, Accenture Plc 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 Accenture Plc will offset losses from the drop in Accenture Plc'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 |
| Accenture Plc vs. Daito Trust Construction | Accenture Plc vs. Playa Hotels Resorts | Accenture Plc vs. DAIRY FARM INTL | Accenture Plc vs. Xenia Hotels Resorts |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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