Correlation Between InterContinental and Gladstone Commercial
Can any of the company-specific risk be diversified away by investing in both InterContinental and Gladstone Commercial 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 Gladstone Commercial 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 Gladstone Commercial, you can compare the effects of market volatilities on InterContinental and Gladstone Commercial 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 Gladstone Commercial. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Gladstone Commercial.
Diversification Opportunities for InterContinental and Gladstone Commercial
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between InterContinental and Gladstone is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Gladstone Commercial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gladstone Commercial 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 Gladstone Commercial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gladstone Commercial has no effect on the direction of InterContinental i.e., InterContinental and Gladstone Commercial go up and down completely randomly.
Pair Corralation between InterContinental and Gladstone Commercial
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.77 times more return on investment than Gladstone Commercial. However, InterContinental Hotels Group is 1.3 times less risky than Gladstone Commercial. It trades about -0.1 of its potential returns per unit of risk. Gladstone Commercial is currently generating about -0.11 per unit of risk. If you would invest 12,200 in InterContinental Hotels Group on October 9, 2024 and sell it today you would lose (200.00) from holding InterContinental Hotels Group or give up 1.64% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Gladstone Commercial
Performance |
| Timeline |
| InterContinental Hotels |
| Gladstone Commercial |
InterContinental and Gladstone Commercial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Gladstone Commercial
The main advantage of trading using opposite InterContinental and Gladstone Commercial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Gladstone Commercial 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 Gladstone Commercial will offset losses from the drop in Gladstone Commercial's long position.| InterContinental vs. FUTURE GAMING GRP | InterContinental vs. Clean Energy Fuels | InterContinental vs. Cleanaway Waste Management | InterContinental vs. ANGANG STEEL H |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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