Correlation Between InterContinental and Superior Plus
Can any of the company-specific risk be diversified away by investing in both InterContinental and Superior Plus 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 Superior Plus 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 Superior Plus Corp, you can compare the effects of market volatilities on InterContinental and Superior Plus 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 Superior Plus. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Superior Plus.
Diversification Opportunities for InterContinental and Superior Plus
-0.36 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InterContinental and Superior is -0.36. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Superior Plus Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Superior Plus Corp 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 Superior Plus. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Superior Plus Corp has no effect on the direction of InterContinental i.e., InterContinental and Superior Plus go up and down completely randomly.
Pair Corralation between InterContinental and Superior Plus
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to under-perform the Superior Plus. But the stock apears to be less risky and, when comparing its historical volatility, InterContinental Hotels Group is 1.19 times less risky than Superior Plus. The stock trades about -0.11 of its potential returns per unit of risk. The Superior Plus Corp is currently generating about 0.03 of returns per unit of risk over similar time horizon. If you would invest 418.00 in Superior Plus Corp on December 11, 2024 and sell it today you would earn a total of 6.00 from holding Superior Plus Corp or generate 1.44% 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. Superior Plus Corp
Performance |
| Timeline |
| InterContinental Hotels |
| Superior Plus Corp |
InterContinental and Superior Plus Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Superior Plus
The main advantage of trading using opposite InterContinental and Superior Plus positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Superior Plus 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 Superior Plus will offset losses from the drop in Superior Plus' long position.| InterContinental vs. AGNC INVESTMENT | InterContinental vs. MEDCAW INVESTMENTS LS 01 | InterContinental vs. PennyMac Mortgage Investment | InterContinental vs. SLR Investment Corp |
| Superior Plus vs. Stag Industrial | Superior Plus vs. GREENX METALS LTD | Superior Plus vs. Guangdong Investment Limited | Superior Plus vs. ADRIATIC METALS LS 013355 |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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