Correlation Between InterContinental and Axway Software
Can any of the company-specific risk be diversified away by investing in both InterContinental and Axway Software 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 Axway Software 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 Axway Software SA, you can compare the effects of market volatilities on InterContinental and Axway Software 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 Axway Software. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Axway Software.
Diversification Opportunities for InterContinental and Axway Software
-0.03 | Correlation Coefficient |
Good diversification
The 3 months correlation between InterContinental and Axway is -0.03. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Axway Software SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Axway Software SA 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 Axway Software. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Axway Software SA has no effect on the direction of InterContinental i.e., InterContinental and Axway Software go up and down completely randomly.
Pair Corralation between InterContinental and Axway Software
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 1.13 times more return on investment than Axway Software. However, InterContinental is 1.13 times more volatile than Axway Software SA. It trades about 0.12 of its potential returns per unit of risk. Axway Software SA is currently generating about -0.14 per unit of risk. If you would invest 11,800 in InterContinental Hotels Group on October 30, 2024 and sell it today you would earn a total of 700.00 from holding InterContinental Hotels Group or generate 5.93% 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. Axway Software SA
Performance |
| Timeline |
| InterContinental Hotels |
| Axway Software SA |
InterContinental and Axway Software Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Axway Software
The main advantage of trading using opposite InterContinental and Axway Software positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Axway Software 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 Axway Software will offset losses from the drop in Axway Software's long position.| InterContinental vs. MPH Health Care | InterContinental vs. National Health Investors | InterContinental vs. Cardinal Health | InterContinental vs. CLOVER HEALTH INV |
| Axway Software vs. TOMBADOR IRON LTD | Axway Software vs. CHAMPION IRON | Axway Software vs. STRAYER EDUCATION | Axway Software vs. IDP EDUCATION 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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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