Correlation Between INTERCONT HOTELS and TRADEDOUBLER
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and TRADEDOUBLER 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 TRADEDOUBLER into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and TRADEDOUBLER AB SK, you can compare the effects of market volatilities on INTERCONT HOTELS and TRADEDOUBLER 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 TRADEDOUBLER. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and TRADEDOUBLER.
Diversification Opportunities for INTERCONT HOTELS and TRADEDOUBLER
-0.31 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTERCONT and TRADEDOUBLER is -0.31. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and TRADEDOUBLER AB SK in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TRADEDOUBLER AB SK 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 TRADEDOUBLER. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TRADEDOUBLER AB SK has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and TRADEDOUBLER go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and TRADEDOUBLER
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.44 times more return on investment than TRADEDOUBLER. However, INTERCONT HOTELS is 2.26 times less risky than TRADEDOUBLER. It trades about 0.21 of its potential returns per unit of risk. TRADEDOUBLER AB SK is currently generating about -0.03 per unit of risk. If you would invest 8,946 in INTERCONT HOTELS on August 28, 2024 and sell it today you would earn a total of 2,654 from holding INTERCONT HOTELS or generate 29.67% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
INTERCONT HOTELS vs. TRADEDOUBLER AB SK
Performance |
| Timeline |
| INTERCONT HOTELS |
| TRADEDOUBLER AB SK |
INTERCONT HOTELS and TRADEDOUBLER Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with INTERCONT HOTELS and TRADEDOUBLER
The main advantage of trading using opposite INTERCONT HOTELS and TRADEDOUBLER positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, TRADEDOUBLER 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 TRADEDOUBLER will offset losses from the drop in TRADEDOUBLER's long position.The idea behind INTERCONT HOTELS and TRADEDOUBLER AB SK pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.| TRADEDOUBLER vs. The Interpublic Group | TRADEDOUBLER vs. Superior Plus Corp | TRADEDOUBLER vs. NMI Holdings | TRADEDOUBLER vs. Origin Agritech |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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