Correlation Between InterContinental and CEOTRONICS (CEKSG)
Can any of the company-specific risk be diversified away by investing in both InterContinental and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) 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 CEOTRONICS, you can compare the effects of market volatilities on InterContinental and CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and CEOTRONICS (CEKSG).
Diversification Opportunities for InterContinental and CEOTRONICS (CEKSG)
0.5 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InterContinental and CEOTRONICS is 0.5. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and CEOTRONICS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG). Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEOTRONICS (CEKSG) has no effect on the direction of InterContinental i.e., InterContinental and CEOTRONICS (CEKSG) go up and down completely randomly.
Pair Corralation between InterContinental and CEOTRONICS (CEKSG)
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.52 times more return on investment than CEOTRONICS (CEKSG). However, InterContinental Hotels Group is 1.91 times less risky than CEOTRONICS (CEKSG). It trades about 0.11 of its potential returns per unit of risk. CEOTRONICS is currently generating about 0.04 per unit of risk. If you would invest 5,571 in InterContinental Hotels Group on September 2, 2024 and sell it today you would earn a total of 6,229 from holding InterContinental Hotels Group or generate 111.81% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. CEOTRONICS
Performance |
| Timeline |
| InterContinental Hotels |
| CEOTRONICS (CEKSG) |
InterContinental and CEOTRONICS (CEKSG) Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and CEOTRONICS (CEKSG)
The main advantage of trading using opposite InterContinental and CEOTRONICS (CEKSG) positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, CEOTRONICS (CEKSG) 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 CEOTRONICS (CEKSG) will offset losses from the drop in CEOTRONICS (CEKSG)'s long position.| InterContinental vs. Micron Technology | InterContinental vs. GALENA MINING LTD | InterContinental vs. Zijin Mining Group | InterContinental vs. Vishay Intertechnology |
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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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
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