Correlation Between INTERCONT HOTELS and Fresnillo Plc
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and Fresnillo 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 Fresnillo 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 Fresnillo plc, you can compare the effects of market volatilities on INTERCONT HOTELS and Fresnillo 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 Fresnillo Plc. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and Fresnillo Plc.
Diversification Opportunities for INTERCONT HOTELS and Fresnillo Plc
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INTERCONT and Fresnillo is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and Fresnillo plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Fresnillo 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 Fresnillo Plc. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Fresnillo plc has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and Fresnillo Plc go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and Fresnillo Plc
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.6 times more return on investment than Fresnillo Plc. However, INTERCONT HOTELS is 1.65 times less risky than Fresnillo Plc. It trades about 0.28 of its potential returns per unit of risk. Fresnillo plc is currently generating about 0.14 per unit of risk. If you would invest 11,900 in INTERCONT HOTELS on October 29, 2024 and sell it today you would earn a total of 700.00 from holding INTERCONT HOTELS or generate 5.88% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. Fresnillo plc
Performance |
| Timeline |
| INTERCONT HOTELS |
| Fresnillo plc |
INTERCONT HOTELS and Fresnillo Plc Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and Fresnillo Plc
The main advantage of trading using opposite INTERCONT HOTELS and Fresnillo Plc positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, Fresnillo 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 Fresnillo Plc will offset losses from the drop in Fresnillo 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 |
| Fresnillo Plc vs. INTERCONT HOTELS | Fresnillo Plc vs. Choice Hotels International | Fresnillo Plc vs. Sunstone Hotel Investors | Fresnillo Plc vs. Broadcom |
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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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