Correlation Between InterContinental and Safestore Holdings
Can any of the company-specific risk be diversified away by investing in both InterContinental and Safestore Holdings 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 Safestore Holdings 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 Safestore Holdings plc, you can compare the effects of market volatilities on InterContinental and Safestore Holdings 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 Safestore Holdings. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Safestore Holdings.
Diversification Opportunities for InterContinental and Safestore Holdings
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterContinental and Safestore is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Safestore Holdings plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Safestore Holdings plc 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 Safestore Holdings. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Safestore Holdings plc has no effect on the direction of InterContinental i.e., InterContinental and Safestore Holdings go up and down completely randomly.
Pair Corralation between InterContinental and Safestore Holdings
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.52 times more return on investment than Safestore Holdings. However, InterContinental Hotels Group is 1.91 times less risky than Safestore Holdings. It trades about 0.11 of its potential returns per unit of risk. Safestore Holdings plc is currently generating about -0.19 per unit of risk. If you would invest 11,800 in InterContinental Hotels Group on October 28, 2024 and sell it today you would earn a total of 700.00 from holding InterContinental Hotels Group or generate 5.93% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Safestore Holdings plc
Performance |
| Timeline |
| InterContinental Hotels |
| Safestore Holdings plc |
InterContinental and Safestore Holdings Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Safestore Holdings
The main advantage of trading using opposite InterContinental and Safestore Holdings positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Safestore Holdings 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 Safestore Holdings will offset losses from the drop in Safestore Holdings' long position.| InterContinental vs. Constellation Software | InterContinental vs. CANON MARKETING JP | InterContinental vs. FAST RETAIL ADR | InterContinental vs. OPERA SOFTWARE |
| Safestore Holdings vs. Lyxor 1 | Safestore Holdings vs. Xtrackers LevDAX | Safestore Holdings vs. Xtrackers ShortDAX | Safestore Holdings vs. Superior Plus 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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