Correlation Between INTERCONT HOTELS and PNC Financial
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and PNC Financial 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 PNC Financial into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and PNC Financial Services, you can compare the effects of market volatilities on INTERCONT HOTELS and PNC Financial 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 PNC Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and PNC Financial.
Diversification Opportunities for INTERCONT HOTELS and PNC Financial
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INTERCONT and PNC is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and PNC Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on PNC Financial Services 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 PNC Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of PNC Financial Services has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and PNC Financial go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and PNC Financial
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.83 times more return on investment than PNC Financial. However, INTERCONT HOTELS is 1.21 times less risky than PNC Financial. It trades about 0.37 of its potential returns per unit of risk. PNC Financial Services is currently generating about 0.09 per unit of risk. If you would invest 11,800 in INTERCONT HOTELS on November 5, 2024 and sell it today you would earn a total of 1,100 from holding INTERCONT HOTELS or generate 9.32% 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. PNC Financial Services
Performance |
| Timeline |
| INTERCONT HOTELS |
| PNC Financial Services |
INTERCONT HOTELS and PNC Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and PNC Financial
The main advantage of trading using opposite INTERCONT HOTELS and PNC Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, PNC Financial 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 PNC Financial will offset losses from the drop in PNC Financial'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 |
| PNC Financial vs. Apple Inc | PNC Financial vs. Apple Inc | PNC Financial vs. Apple Inc | PNC Financial 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.
Other Complementary Tools
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Idea Breakdown Analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes | |
| Portfolio Center All portfolio management and optimization tools to improve performance of your portfolios | |
| Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
| Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments |