Correlation Between InterContinental and ADRIATIC METALS
Can any of the company-specific risk be diversified away by investing in both InterContinental and ADRIATIC METALS 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 ADRIATIC METALS 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 ADRIATIC METALS LS 013355, you can compare the effects of market volatilities on InterContinental and ADRIATIC METALS 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 ADRIATIC METALS. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and ADRIATIC METALS.
Diversification Opportunities for InterContinental and ADRIATIC METALS
0.78 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InterContinental and ADRIATIC is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and ADRIATIC METALS LS 013355 in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ADRIATIC METALS LS 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 ADRIATIC METALS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ADRIATIC METALS LS has no effect on the direction of InterContinental i.e., InterContinental and ADRIATIC METALS go up and down completely randomly.
Pair Corralation between InterContinental and ADRIATIC METALS
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.34 times more return on investment than ADRIATIC METALS. However, InterContinental Hotels Group is 2.93 times less risky than ADRIATIC METALS. It trades about 0.14 of its potential returns per unit of risk. ADRIATIC METALS LS 013355 is currently generating about 0.02 per unit of risk. If you would invest 9,245 in InterContinental Hotels Group on August 31, 2024 and sell it today you would earn a total of 2,555 from holding InterContinental Hotels Group or generate 27.64% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.23% |
| Values | Daily Returns |
InterContinental Hotels Group vs. ADRIATIC METALS LS 013355
Performance |
| Timeline |
| InterContinental Hotels |
| ADRIATIC METALS LS |
InterContinental and ADRIATIC METALS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and ADRIATIC METALS
The main advantage of trading using opposite InterContinental and ADRIATIC METALS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, ADRIATIC METALS 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 ADRIATIC METALS will offset losses from the drop in ADRIATIC METALS's long position.| InterContinental vs. QURATE RETAIL INC | InterContinental vs. PACIFIC ONLINE | InterContinental vs. CODERE ONLINE LUX | InterContinental vs. JIAHUA STORES |
| ADRIATIC METALS vs. Rio Tinto Group | ADRIATIC METALS vs. Liontown Resources Limited | ADRIATIC METALS vs. American Lithium Corp |
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 Economic Indicators module to top statistical indicators that provide insights into how an economy is performing.
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