Correlation Between InterContinental and Gaztransport Technigaz
Can any of the company-specific risk be diversified away by investing in both InterContinental and Gaztransport Technigaz 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 Gaztransport Technigaz 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 Gaztransport Technigaz SA, you can compare the effects of market volatilities on InterContinental and Gaztransport Technigaz 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 Gaztransport Technigaz. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Gaztransport Technigaz.
Diversification Opportunities for InterContinental and Gaztransport Technigaz
0.84 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between InterContinental and Gaztransport is 0.84. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Gaztransport Technigaz SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport Technigaz 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 Gaztransport Technigaz. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport Technigaz has no effect on the direction of InterContinental i.e., InterContinental and Gaztransport Technigaz go up and down completely randomly.
Pair Corralation between InterContinental and Gaztransport Technigaz
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.76 times more return on investment than Gaztransport Technigaz. However, InterContinental Hotels Group is 1.31 times less risky than Gaztransport Technigaz. It trades about 0.15 of its potential returns per unit of risk. Gaztransport Technigaz SA is currently generating about 0.02 per unit of risk. If you would invest 9,295 in InterContinental Hotels Group on September 5, 2024 and sell it today you would earn a total of 2,805 from holding InterContinental Hotels Group or generate 30.18% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 99.22% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Gaztransport Technigaz SA
Performance |
| Timeline |
| InterContinental Hotels |
| Gaztransport Technigaz |
InterContinental and Gaztransport Technigaz Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Gaztransport Technigaz
The main advantage of trading using opposite InterContinental and Gaztransport Technigaz positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Gaztransport Technigaz 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 Gaztransport Technigaz will offset losses from the drop in Gaztransport Technigaz's long position.| InterContinental vs. Hilton Worldwide Holdings | InterContinental vs. Hyatt Hotels | InterContinental vs. ACCOR SPADR NEW |
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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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.
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