Correlation Between INTERCONT HOTELS and Salesforce
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and Salesforce 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 Salesforce into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and Salesforce, you can compare the effects of market volatilities on INTERCONT HOTELS and Salesforce 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 Salesforce. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and Salesforce.
Diversification Opportunities for INTERCONT HOTELS and Salesforce
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between INTERCONT and Salesforce is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and Salesforce in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Salesforce 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 Salesforce. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Salesforce has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and Salesforce go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and Salesforce
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 1.2 times less return on investment than Salesforce. In addition to that, INTERCONT HOTELS is 1.05 times more volatile than Salesforce. It trades about 0.21 of its total potential returns per unit of risk. Salesforce is currently generating about 0.26 per unit of volatility. If you would invest 22,716 in Salesforce on September 3, 2024 and sell it today you would earn a total of 8,689 from holding Salesforce or generate 38.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. Salesforce
Performance |
| Timeline |
| INTERCONT HOTELS |
| Salesforce |
INTERCONT HOTELS and Salesforce Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and Salesforce
The main advantage of trading using opposite INTERCONT HOTELS and Salesforce positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, Salesforce 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 Salesforce will offset losses from the drop in Salesforce's long position.| INTERCONT HOTELS vs. Hilton Worldwide Holdings | INTERCONT HOTELS vs. Hyatt Hotels | INTERCONT HOTELS vs. InterContinental Hotels Group | INTERCONT HOTELS vs. ACCOR SPADR NEW |
| Salesforce vs. Rocket Internet SE | Salesforce vs. Superior Plus Corp | Salesforce vs. NMI Holdings | Salesforce vs. Origin Agritech |
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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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