Correlation Between InterContinental and China Petroleum
Can any of the company-specific risk be diversified away by investing in both InterContinental and China Petroleum 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 China Petroleum 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 China Petroleum Chemical, you can compare the effects of market volatilities on InterContinental and China Petroleum 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 China Petroleum. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and China Petroleum.
Diversification Opportunities for InterContinental and China Petroleum
-0.47 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InterContinental and China is -0.47. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and China Petroleum Chemical in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on China Petroleum Chemical 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 China Petroleum. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of China Petroleum Chemical has no effect on the direction of InterContinental i.e., InterContinental and China Petroleum go up and down completely randomly.
Pair Corralation between InterContinental and China Petroleum
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.81 times more return on investment than China Petroleum. However, InterContinental Hotels Group is 1.23 times less risky than China Petroleum. It trades about 0.17 of its potential returns per unit of risk. China Petroleum Chemical is currently generating about 0.1 per unit of risk. If you would invest 11,400 in InterContinental Hotels Group on September 14, 2024 and sell it today you would earn a total of 700.00 from holding InterContinental Hotels Group or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. China Petroleum Chemical
Performance |
| Timeline |
| InterContinental Hotels |
| China Petroleum Chemical |
InterContinental and China Petroleum Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and China Petroleum
The main advantage of trading using opposite InterContinental and China Petroleum positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, China Petroleum 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 China Petroleum will offset losses from the drop in China Petroleum's long position.| InterContinental vs. Performance Food Group | InterContinental vs. TYSON FOODS A | InterContinental vs. Iridium Communications | InterContinental vs. National Beverage Corp |
| China Petroleum vs. HYATT HOTELS A | China Petroleum vs. Charoen Pokphand Foods | China Petroleum vs. InterContinental Hotels Group | China Petroleum vs. National Beverage Corp |
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 Theme Ratings module to determine theme ratings based on digital equity recommendations. Macroaxis theme ratings are based on combination of fundamental analysis and risk-adjusted market performance.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Idea Analyzer Analyze all characteristics, volatility and risk-adjusted return of Macroaxis ideas | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments |