Correlation Between INTERCONT HOTELS and Power Assets
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and Power Assets 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 Power Assets into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and Power Assets Holdings, you can compare the effects of market volatilities on INTERCONT HOTELS and Power Assets 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 Power Assets. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and Power Assets.
Diversification Opportunities for INTERCONT HOTELS and Power Assets
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between INTERCONT and Power is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and Power Assets Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Power Assets Holdings 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 Power Assets. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Power Assets Holdings has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and Power Assets go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and Power Assets
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 1.01 times more return on investment than Power Assets. However, INTERCONT HOTELS is 1.01 times more volatile than Power Assets Holdings. It trades about 0.14 of its potential returns per unit of risk. Power Assets Holdings is currently generating about 0.02 per unit of risk. If you would invest 11,700 in INTERCONT HOTELS on October 30, 2024 and sell it today you would earn a total of 700.00 from holding INTERCONT HOTELS or generate 5.98% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. Power Assets Holdings
Performance |
| Timeline |
| INTERCONT HOTELS |
| Power Assets Holdings |
INTERCONT HOTELS and Power Assets Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and Power Assets
The main advantage of trading using opposite INTERCONT HOTELS and Power Assets positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, Power Assets 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 Power Assets will offset losses from the drop in Power Assets' long position.| INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
| Power Assets vs. ZINC MEDIA GR | Power Assets vs. SBM OFFSHORE | Power Assets vs. CHINA SOUTHN AIR H | Power Assets vs. GigaMedia |
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 Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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