Correlation Between INTERCONT HOTELS and GURU ORGANIC
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and GURU ORGANIC 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 GURU ORGANIC into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and GURU ORGANIC ENERGY, you can compare the effects of market volatilities on INTERCONT HOTELS and GURU ORGANIC 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 GURU ORGANIC. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and GURU ORGANIC.
Diversification Opportunities for INTERCONT HOTELS and GURU ORGANIC
-0.25 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTERCONT and GURU is -0.25. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and GURU ORGANIC ENERGY in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GURU ORGANIC ENERGY 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 GURU ORGANIC. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GURU ORGANIC ENERGY has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and GURU ORGANIC go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and GURU ORGANIC
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.42 times more return on investment than GURU ORGANIC. However, INTERCONT HOTELS is 2.37 times less risky than GURU ORGANIC. It trades about 0.2 of its potential returns per unit of risk. GURU ORGANIC ENERGY is currently generating about -0.01 per unit of risk. If you would invest 8,399 in INTERCONT HOTELS on November 4, 2024 and sell it today you would earn a total of 4,301 from holding INTERCONT HOTELS or generate 51.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. GURU ORGANIC ENERGY
Performance |
| Timeline |
| INTERCONT HOTELS |
| GURU ORGANIC ENERGY |
INTERCONT HOTELS and GURU ORGANIC Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and GURU ORGANIC
The main advantage of trading using opposite INTERCONT HOTELS and GURU ORGANIC positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, GURU ORGANIC 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 GURU ORGANIC will offset losses from the drop in GURU ORGANIC'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 |
| GURU ORGANIC vs. DELTA AIR LINES | GURU ORGANIC vs. MAGIC SOFTWARE ENTR | GURU ORGANIC vs. CHINA SOUTHN AIR H | GURU ORGANIC vs. Norwegian Air Shuttle |
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 Portfolio Anywhere module to track or share privately all of your investments from the convenience of any device.
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