Correlation Between INTERCONT HOTELS and InterContinental
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and InterContinental 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 InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and InterContinental Hotels Group, you can compare the effects of market volatilities on INTERCONT HOTELS and InterContinental 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 InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and InterContinental.
Diversification Opportunities for INTERCONT HOTELS and InterContinental
0.99 | Correlation Coefficient |
No risk reduction
The 3 months correlation between INTERCONT and InterContinental is 0.99. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels 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 InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and InterContinental go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and InterContinental
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 1.64 times more return on investment than InterContinental. However, INTERCONT HOTELS is 1.64 times more volatile than InterContinental Hotels Group. It trades about 0.23 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.36 per unit of risk. If you would invest 10,200 in INTERCONT HOTELS on August 28, 2024 and sell it today you would earn a total of 1,400 from holding INTERCONT HOTELS or generate 13.73% 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. InterContinental Hotels Group
Performance |
| Timeline |
| INTERCONT HOTELS |
| InterContinental Hotels |
INTERCONT HOTELS and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and InterContinental
The main advantage of trading using opposite INTERCONT HOTELS and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental'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 |
| InterContinental vs. COMMERCIAL VEHICLE | InterContinental vs. ITALIAN WINE BRANDS | InterContinental vs. Zijin Mining Group | InterContinental vs. Perseus Mining Limited |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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