Correlation Between InterContinental and CEWE Stiftung
Can any of the company-specific risk be diversified away by investing in both InterContinental and CEWE Stiftung 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 CEWE Stiftung 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 CEWE Stiftung Co, you can compare the effects of market volatilities on InterContinental and CEWE Stiftung 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 CEWE Stiftung. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and CEWE Stiftung.
Diversification Opportunities for InterContinental and CEWE Stiftung
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between InterContinental and CEWE is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and CEWE Stiftung Co in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on CEWE Stiftung 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 CEWE Stiftung. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of CEWE Stiftung has no effect on the direction of InterContinental i.e., InterContinental and CEWE Stiftung go up and down completely randomly.
Pair Corralation between InterContinental and CEWE Stiftung
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 1.0 times more return on investment than CEWE Stiftung. However, InterContinental Hotels Group is 1.0 times less risky than CEWE Stiftung. It trades about 0.11 of its potential returns per unit of risk. CEWE Stiftung Co is currently generating about 0.03 per unit of risk. If you would invest 6,148 in InterContinental Hotels Group on October 22, 2024 and sell it today you would earn a total of 6,152 from holding InterContinental Hotels Group or generate 100.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 99.8% |
| Values | Daily Returns |
InterContinental Hotels Group vs. CEWE Stiftung Co
Performance |
| Timeline |
| InterContinental Hotels |
| CEWE Stiftung |
InterContinental and CEWE Stiftung Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and CEWE Stiftung
The main advantage of trading using opposite InterContinental and CEWE Stiftung positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, CEWE Stiftung 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 CEWE Stiftung will offset losses from the drop in CEWE Stiftung's long position.| InterContinental vs. COLUMBIA SPORTSWEAR | InterContinental vs. DICKS Sporting Goods | InterContinental vs. TT Electronics PLC | InterContinental vs. Transport International Holdings |
| CEWE Stiftung vs. ecotel communication ag | CEWE Stiftung vs. VARIOUS EATERIES LS | CEWE Stiftung vs. Computershare Limited | CEWE Stiftung vs. Sekisui Chemical Co |
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 Equity Valuation module to check real value of public entities based on technical and fundamental data.
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