Correlation Between INTERCONT HOTELS and KeyCorp
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and KeyCorp 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 KeyCorp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and KeyCorp, you can compare the effects of market volatilities on INTERCONT HOTELS and KeyCorp 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 KeyCorp. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and KeyCorp.
Diversification Opportunities for INTERCONT HOTELS and KeyCorp
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between INTERCONT and KeyCorp is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and KeyCorp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KeyCorp 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 KeyCorp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KeyCorp has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and KeyCorp go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and KeyCorp
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 1.16 times less return on investment than KeyCorp. But when comparing it to its historical volatility, INTERCONT HOTELS is 1.0 times less risky than KeyCorp. It trades about 0.24 of its potential returns per unit of risk. KeyCorp is currently generating about 0.28 of returns per unit of risk over similar time horizon. If you would invest 1,562 in KeyCorp on September 3, 2024 and sell it today you would earn a total of 273.00 from holding KeyCorp or generate 17.48% 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. KeyCorp
Performance |
| Timeline |
| INTERCONT HOTELS |
| KeyCorp |
INTERCONT HOTELS and KeyCorp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and KeyCorp
The main advantage of trading using opposite INTERCONT HOTELS and KeyCorp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, KeyCorp 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 KeyCorp will offset losses from the drop in KeyCorp'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 |
| KeyCorp vs. US Bancorp | KeyCorp vs. The PNC Financial | KeyCorp vs. Fifth Third Bancorp | KeyCorp vs. Regions Financial |
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 Holdings module to check your current holdings and cash postion to detemine if your portfolio needs rebalancing.
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