Correlation Between INTERCONT HOTELS and Sekisui Chemical
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and Sekisui Chemical 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 Sekisui Chemical into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and Sekisui Chemical Co, you can compare the effects of market volatilities on INTERCONT HOTELS and Sekisui Chemical 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 Sekisui Chemical. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and Sekisui Chemical.
Diversification Opportunities for INTERCONT HOTELS and Sekisui Chemical
0.71 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INTERCONT and Sekisui is 0.71. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and Sekisui Chemical Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sekisui Chemical 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 Sekisui Chemical. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sekisui Chemical has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and Sekisui Chemical go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and Sekisui Chemical
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.56 times more return on investment than Sekisui Chemical. However, INTERCONT HOTELS is 1.79 times less risky than Sekisui Chemical. It trades about 0.2 of its potential returns per unit of risk. Sekisui Chemical Co is currently generating about -0.15 per unit of risk. If you would invest 12,000 in INTERCONT HOTELS on November 3, 2024 and sell it today you would earn a total of 700.00 from holding INTERCONT HOTELS or generate 5.83% 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. Sekisui Chemical Co
Performance |
| Timeline |
| INTERCONT HOTELS |
| Sekisui Chemical |
INTERCONT HOTELS and Sekisui Chemical Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and Sekisui Chemical
The main advantage of trading using opposite INTERCONT HOTELS and Sekisui Chemical positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, Sekisui Chemical 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 Sekisui Chemical will offset losses from the drop in Sekisui Chemical'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 |
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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 Stock Tickers module to use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites.
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