Correlation Between InterContinental and UNIVMUSIC GRPADR/050
Can any of the company-specific risk be diversified away by investing in both InterContinental and UNIVMUSIC GRPADR/050 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 InterContinental and UNIVMUSIC GRPADR/050 into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InterContinental Hotels Group and UNIVMUSIC GRPADR050, you can compare the effects of market volatilities on InterContinental and UNIVMUSIC GRPADR/050 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 InterContinental with a short position of UNIVMUSIC GRPADR/050. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and UNIVMUSIC GRPADR/050.
Diversification Opportunities for InterContinental and UNIVMUSIC GRPADR/050
-0.26 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InterContinental and UNIVMUSIC is -0.26. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and UNIVMUSIC GRPADR050 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on UNIVMUSIC GRPADR/050 and InterContinental 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 InterContinental Hotels Group are associated (or correlated) with UNIVMUSIC GRPADR/050. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of UNIVMUSIC GRPADR/050 has no effect on the direction of InterContinental i.e., InterContinental and UNIVMUSIC GRPADR/050 go up and down completely randomly.
Pair Corralation between InterContinental and UNIVMUSIC GRPADR/050
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 1.12 times more return on investment than UNIVMUSIC GRPADR/050. However, InterContinental is 1.12 times more volatile than UNIVMUSIC GRPADR050. It trades about 0.26 of its potential returns per unit of risk. UNIVMUSIC GRPADR050 is currently generating about -0.05 per unit of risk. If you would invest 9,950 in InterContinental Hotels Group on August 31, 2024 and sell it today you would earn a total of 1,850 from holding InterContinental Hotels Group or generate 18.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. UNIVMUSIC GRPADR050
Performance |
| Timeline |
| InterContinental Hotels |
| UNIVMUSIC GRPADR/050 |
InterContinental and UNIVMUSIC GRPADR/050 Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and UNIVMUSIC GRPADR/050
The main advantage of trading using opposite InterContinental and UNIVMUSIC GRPADR/050 positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, UNIVMUSIC GRPADR/050 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 UNIVMUSIC GRPADR/050 will offset losses from the drop in UNIVMUSIC GRPADR/050's long position.| InterContinental vs. QURATE RETAIL INC | InterContinental vs. PACIFIC ONLINE | InterContinental vs. CODERE ONLINE LUX | InterContinental vs. JIAHUA STORES |
| UNIVMUSIC GRPADR/050 vs. Austevoll Seafood ASA | UNIVMUSIC GRPADR/050 vs. Tyson Foods | UNIVMUSIC GRPADR/050 vs. Perseus Mining Limited | UNIVMUSIC GRPADR/050 vs. GALENA MINING LTD |
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 Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
Other Complementary Tools
| Watchlist Optimization Optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm | |
| Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Portfolio Rebalancing Analyze risk-adjusted returns against different time horizons to find asset-allocation targets |