Correlation Between InterContinental and Healthequity
Can any of the company-specific risk be diversified away by investing in both InterContinental and Healthequity 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 Healthequity 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 Healthequity, you can compare the effects of market volatilities on InterContinental and Healthequity 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 Healthequity. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Healthequity.
Diversification Opportunities for InterContinental and Healthequity
0.59 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InterContinental and Healthequity is 0.59. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Healthequity in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Healthequity 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 Healthequity. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Healthequity has no effect on the direction of InterContinental i.e., InterContinental and Healthequity go up and down completely randomly.
Pair Corralation between InterContinental and Healthequity
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to under-perform the Healthequity. In addition to that, InterContinental is 1.01 times more volatile than Healthequity. It trades about -0.4 of its total potential returns per unit of risk. Healthequity is currently generating about -0.36 per unit of volatility. If you would invest 10,800 in Healthequity on December 10, 2024 and sell it today you would lose (1,550) from holding Healthequity or give up 14.35% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Healthequity
Performance |
| Timeline |
| InterContinental Hotels |
| Healthequity |
InterContinental and Healthequity Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Healthequity
The main advantage of trading using opposite InterContinental and Healthequity positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Healthequity 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 Healthequity will offset losses from the drop in Healthequity's long position.| InterContinental vs. AGNC INVESTMENT | InterContinental vs. MEDCAW INVESTMENTS LS 01 | InterContinental vs. PennyMac Mortgage Investment | InterContinental vs. SLR Investment Corp |
| Healthequity vs. SOFI TECHNOLOGIES | Healthequity vs. BRIT AMER TOBACCO | Healthequity vs. ASPEN TECHINC DL | Healthequity vs. Sunny Optical Technology |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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