Correlation Between INTERCONT HOTELS and FLOW TRADERS
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and FLOW TRADERS 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 FLOW TRADERS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and FLOW TRADERS LTD, you can compare the effects of market volatilities on INTERCONT HOTELS and FLOW TRADERS 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 FLOW TRADERS. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and FLOW TRADERS.
Diversification Opportunities for INTERCONT HOTELS and FLOW TRADERS
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between INTERCONT and FLOW is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and FLOW TRADERS LTD in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FLOW TRADERS LTD 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 FLOW TRADERS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FLOW TRADERS LTD has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and FLOW TRADERS go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and FLOW TRADERS
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 2.03 times more return on investment than FLOW TRADERS. However, INTERCONT HOTELS is 2.03 times more volatile than FLOW TRADERS LTD. It trades about 0.2 of its potential returns per unit of risk. FLOW TRADERS LTD is currently generating about -0.03 per unit of risk. If you would invest 10,200 in INTERCONT HOTELS on August 25, 2024 and sell it today you would earn a total of 1,200 from holding INTERCONT HOTELS or generate 11.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. FLOW TRADERS LTD
Performance |
| Timeline |
| INTERCONT HOTELS |
| FLOW TRADERS LTD |
INTERCONT HOTELS and FLOW TRADERS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and FLOW TRADERS
The main advantage of trading using opposite INTERCONT HOTELS and FLOW TRADERS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, FLOW TRADERS 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 FLOW TRADERS will offset losses from the drop in FLOW TRADERS'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 |
| FLOW TRADERS vs. Macquarie Group Limited | FLOW TRADERS vs. MSCI Inc | FLOW TRADERS vs. Superior Plus Corp | FLOW TRADERS vs. NMI Holdings |
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 Insider Screener module to find insiders across different sectors to evaluate their impact on performance.
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