Correlation Between INTERCONT HOTELS and Park Hotels
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and Park Hotels 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 Park Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and Park Hotels Resorts, you can compare the effects of market volatilities on INTERCONT HOTELS and Park Hotels 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 Park Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and Park Hotels.
Diversification Opportunities for INTERCONT HOTELS and Park Hotels
0.6 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INTERCONT and Park is 0.6. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and Park Hotels Resorts in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Park Hotels Resorts 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 Park Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Park Hotels Resorts has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and Park Hotels go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and Park Hotels
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.69 times more return on investment than Park Hotels. However, INTERCONT HOTELS is 1.44 times less risky than Park Hotels. It trades about 0.11 of its potential returns per unit of risk. Park Hotels Resorts is currently generating about 0.05 per unit of risk. If you would invest 5,086 in INTERCONT HOTELS on August 28, 2024 and sell it today you would earn a total of 6,514 from holding INTERCONT HOTELS or generate 128.08% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
INTERCONT HOTELS vs. Park Hotels Resorts
Performance |
Timeline |
INTERCONT HOTELS |
Park Hotels Resorts |
INTERCONT HOTELS and Park Hotels Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with INTERCONT HOTELS and Park Hotels
The main advantage of trading using opposite INTERCONT HOTELS and Park Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, Park Hotels 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 Park Hotels will offset losses from the drop in Park Hotels' long position.INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc | Park Hotels vs. Apple Inc |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
Other Complementary Tools
Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
Insider Screener Find insiders across different sectors to evaluate their impact on performance | |
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Cryptocurrency Center Build and monitor diversified portfolio of extremely risky digital assets and cryptocurrency | |
Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes |