Correlation Between InterContinental and TOWNSQUARE MEDIA
Can any of the company-specific risk be diversified away by investing in both InterContinental and TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA INC, you can compare the effects of market volatilities on InterContinental and TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and TOWNSQUARE MEDIA.
Diversification Opportunities for InterContinental and TOWNSQUARE MEDIA
-0.29 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InterContinental and TOWNSQUARE is -0.29. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and TOWNSQUARE MEDIA INC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TOWNSQUARE MEDIA INC 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 TOWNSQUARE MEDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TOWNSQUARE MEDIA INC has no effect on the direction of InterContinental i.e., InterContinental and TOWNSQUARE MEDIA go up and down completely randomly.
Pair Corralation between InterContinental and TOWNSQUARE MEDIA
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.75 times more return on investment than TOWNSQUARE MEDIA. However, InterContinental Hotels Group is 1.32 times less risky than TOWNSQUARE MEDIA. It trades about 0.23 of its potential returns per unit of risk. TOWNSQUARE MEDIA INC is currently generating about -0.05 per unit of risk. If you would invest 10,200 in InterContinental Hotels Group on October 25, 2024 and sell it today you would earn a total of 2,300 from holding InterContinental Hotels Group or generate 22.55% 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. TOWNSQUARE MEDIA INC
Performance |
| Timeline |
| InterContinental Hotels |
| TOWNSQUARE MEDIA INC |
InterContinental and TOWNSQUARE MEDIA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and TOWNSQUARE MEDIA
The main advantage of trading using opposite InterContinental and TOWNSQUARE MEDIA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, TOWNSQUARE MEDIA 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 TOWNSQUARE MEDIA will offset losses from the drop in TOWNSQUARE MEDIA's long position.| InterContinental vs. Ribbon Communications | InterContinental vs. US FOODS HOLDING | InterContinental vs. TYSON FOODS A | InterContinental vs. Chengdu PUTIAN Telecommunications |
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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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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