Correlation Between INTERCONT HOTELS and KUBOTA CORP
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and KUBOTA CORP 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 KUBOTA CORP into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and KUBOTA P ADR20, you can compare the effects of market volatilities on INTERCONT HOTELS and KUBOTA CORP 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 KUBOTA CORP. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and KUBOTA CORP.
Diversification Opportunities for INTERCONT HOTELS and KUBOTA CORP
-0.75 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between INTERCONT and KUBOTA is -0.75. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and KUBOTA P ADR20 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on KUBOTA P ADR20 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 KUBOTA CORP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of KUBOTA P ADR20 has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and KUBOTA CORP go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and KUBOTA CORP
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.99 times more return on investment than KUBOTA CORP. However, INTERCONT HOTELS is 1.01 times less risky than KUBOTA CORP. It trades about 0.12 of its potential returns per unit of risk. KUBOTA P ADR20 is currently generating about -0.08 per unit of risk. If you would invest 8,797 in INTERCONT HOTELS on September 3, 2024 and sell it today you would earn a total of 2,903 from holding INTERCONT HOTELS or generate 33.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. KUBOTA P ADR20
Performance |
| Timeline |
| INTERCONT HOTELS |
| KUBOTA P ADR20 |
INTERCONT HOTELS and KUBOTA CORP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and KUBOTA CORP
The main advantage of trading using opposite INTERCONT HOTELS and KUBOTA CORP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, KUBOTA CORP 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 KUBOTA CORP will offset losses from the drop in KUBOTA CORP'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 |
| KUBOTA CORP vs. Citic Telecom International | KUBOTA CORP vs. Entravision Communications | KUBOTA CORP vs. DICKS Sporting Goods | KUBOTA CORP vs. Transportadora de Gas |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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