Correlation Between INTERCONT HOTELS and EON SE
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and EON SE 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 EON SE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and EON SE, you can compare the effects of market volatilities on INTERCONT HOTELS and EON SE 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 EON SE. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and EON SE.
Diversification Opportunities for INTERCONT HOTELS and EON SE
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INTERCONT and EON is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and EON SE in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on EON SE 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 EON SE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of EON SE has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and EON SE go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and EON SE
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 1.54 times more return on investment than EON SE. However, INTERCONT HOTELS is 1.54 times more volatile than EON SE. It trades about 0.11 of its potential returns per unit of risk. EON SE is currently generating about 0.07 per unit of risk. If you would invest 4,990 in INTERCONT HOTELS on September 14, 2024 and sell it today you would earn a total of 6,810 from holding INTERCONT HOTELS or generate 136.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. EON SE
Performance |
| Timeline |
| INTERCONT HOTELS |
| EON SE |
INTERCONT HOTELS and EON SE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and EON SE
The main advantage of trading using opposite INTERCONT HOTELS and EON SE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, EON SE 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 EON SE will offset losses from the drop in EON SE's long position.| INTERCONT HOTELS vs. Hyatt Hotels | INTERCONT HOTELS vs. InterContinental Hotels Group | INTERCONT HOTELS vs. Wyndham Hotels Resorts | INTERCONT HOTELS vs. Choice Hotels International |
| EON SE vs. Shenandoah Telecommunications | EON SE vs. Consolidated Communications Holdings | EON SE vs. COSMOSTEEL HLDGS | EON SE vs. ALGOMA STEEL 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 Positions Ratings module to determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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