Correlation Between InterContinental and COSMOSTEEL HLDGS
Can any of the company-specific risk be diversified away by investing in both InterContinental and COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS, you can compare the effects of market volatilities on InterContinental and COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and COSMOSTEEL HLDGS.
Diversification Opportunities for InterContinental and COSMOSTEEL HLDGS
0.01 | Correlation Coefficient |
Significant diversification
The 3 months correlation between InterContinental and COSMOSTEEL is 0.01. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and COSMOSTEEL HLDGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of COSMOSTEEL HLDGS has no effect on the direction of InterContinental i.e., InterContinental and COSMOSTEEL HLDGS go up and down completely randomly.
Pair Corralation between InterContinental and COSMOSTEEL HLDGS
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.68 times more return on investment than COSMOSTEEL HLDGS. However, InterContinental Hotels Group is 1.48 times less risky than COSMOSTEEL HLDGS. It trades about 0.35 of its potential returns per unit of risk. COSMOSTEEL HLDGS is currently generating about -0.13 per unit of risk. If you would invest 10,100 in InterContinental Hotels Group on August 25, 2024 and sell it today you would earn a total of 1,400 from holding InterContinental Hotels Group or generate 13.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. COSMOSTEEL HLDGS
Performance |
| Timeline |
| InterContinental Hotels |
| COSMOSTEEL HLDGS |
InterContinental and COSMOSTEEL HLDGS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and COSMOSTEEL HLDGS
The main advantage of trading using opposite InterContinental and COSMOSTEEL HLDGS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, COSMOSTEEL HLDGS 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 COSMOSTEEL HLDGS will offset losses from the drop in COSMOSTEEL HLDGS's long position.| InterContinental vs. INTERCONT HOTELS | InterContinental vs. Accor SA | InterContinental vs. Choice Hotels International |
| COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc | COSMOSTEEL HLDGS vs. Apple Inc |
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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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