Correlation Between InterContinental and Apple
Can any of the company-specific risk be diversified away by investing in both InterContinental and Apple 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 Apple 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 Apple Inc, you can compare the effects of market volatilities on InterContinental and Apple 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 Apple. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Apple.
Diversification Opportunities for InterContinental and Apple
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between InterContinental and Apple is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Apple Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Apple 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 Apple. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Apple Inc has no effect on the direction of InterContinental i.e., InterContinental and Apple go up and down completely randomly.
Pair Corralation between InterContinental and Apple
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.97 times more return on investment than Apple. However, InterContinental Hotels Group is 1.03 times less risky than Apple. It trades about 0.0 of its potential returns per unit of risk. Apple Inc is currently generating about -0.16 per unit of risk. If you would invest 12,000 in InterContinental Hotels Group on October 17, 2024 and sell it today you would earn a total of 0.00 from holding InterContinental Hotels Group or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Apple Inc
Performance |
| Timeline |
| InterContinental Hotels |
| Apple Inc |
InterContinental and Apple Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Apple
The main advantage of trading using opposite InterContinental and Apple positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Apple 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 Apple will offset losses from the drop in Apple's long position.| InterContinental vs. Vulcan Materials | InterContinental vs. Applied Materials | InterContinental vs. Summit Materials | InterContinental vs. Materialise NV |
| Apple vs. SCOTT TECHNOLOGY | Apple vs. InterContinental Hotels Group | Apple vs. COVIVIO HOTELS INH | Apple vs. Pebblebrook Hotel Trust |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
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