Correlation Between InterContinental and CENTURIA OFFICE
Can any of the company-specific risk be diversified away by investing in both InterContinental and CENTURIA OFFICE 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 CENTURIA OFFICE 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 CENTURIA OFFICE REIT, you can compare the effects of market volatilities on InterContinental and CENTURIA OFFICE 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 CENTURIA OFFICE. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and CENTURIA OFFICE.
Diversification Opportunities for InterContinental and CENTURIA OFFICE
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InterContinental and CENTURIA is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and CENTURIA OFFICE REIT in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CENTURIA OFFICE REIT 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 CENTURIA OFFICE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CENTURIA OFFICE REIT has no effect on the direction of InterContinental i.e., InterContinental and CENTURIA OFFICE go up and down completely randomly.
Pair Corralation between InterContinental and CENTURIA OFFICE
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.73 times more return on investment than CENTURIA OFFICE. However, InterContinental Hotels Group is 1.37 times less risky than CENTURIA OFFICE. It trades about 0.25 of its potential returns per unit of risk. CENTURIA OFFICE REIT is currently generating about 0.04 per unit of risk. If you would invest 8,450 in InterContinental Hotels Group on November 3, 2024 and sell it today you would earn a total of 4,350 from holding InterContinental Hotels Group or generate 51.48% 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. CENTURIA OFFICE REIT
Performance |
| Timeline |
| InterContinental Hotels |
| CENTURIA OFFICE REIT |
InterContinental and CENTURIA OFFICE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and CENTURIA OFFICE
The main advantage of trading using opposite InterContinental and CENTURIA OFFICE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, CENTURIA OFFICE 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 CENTURIA OFFICE will offset losses from the drop in CENTURIA OFFICE's long position.| InterContinental vs. Marriott International | InterContinental vs. Hilton Worldwide Holdings | InterContinental vs. H World Group | InterContinental vs. Hyatt Hotels |
| CENTURIA OFFICE vs. PURE FOODS TASMANIA | CENTURIA OFFICE vs. Endeavour Mining PLC | CENTURIA OFFICE vs. THAI BEVERAGE | CENTURIA OFFICE 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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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