Correlation Between InterContinental and MELIA HOTELS
Can any of the company-specific risk be diversified away by investing in both InterContinental and MELIA HOTELS 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 MELIA HOTELS 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 MELIA HOTELS, you can compare the effects of market volatilities on InterContinental and MELIA HOTELS 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 MELIA HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and MELIA HOTELS.
Diversification Opportunities for InterContinental and MELIA HOTELS
0.22 | Correlation Coefficient |
Modest diversification
The 3 months correlation between InterContinental and MELIA is 0.22. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and MELIA HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MELIA HOTELS 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 MELIA HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MELIA HOTELS has no effect on the direction of InterContinental i.e., InterContinental and MELIA HOTELS go up and down completely randomly.
Pair Corralation between InterContinental and MELIA HOTELS
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.77 times more return on investment than MELIA HOTELS. However, InterContinental Hotels Group is 1.3 times less risky than MELIA HOTELS. It trades about 0.09 of its potential returns per unit of risk. MELIA HOTELS is currently generating about -0.01 per unit of risk. If you would invest 9,245 in InterContinental Hotels Group on November 28, 2024 and sell it today you would earn a total of 2,455 from holding InterContinental Hotels Group or generate 26.55% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. MELIA HOTELS
Performance |
| Timeline |
| InterContinental Hotels |
| MELIA HOTELS |
InterContinental and MELIA HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and MELIA HOTELS
The main advantage of trading using opposite InterContinental and MELIA HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, MELIA HOTELS 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 MELIA HOTELS will offset losses from the drop in MELIA HOTELS's long position.| InterContinental vs. CLOVER HEALTH INV | InterContinental vs. SYSTEMAIR AB | InterContinental vs. Japan Tobacco | InterContinental vs. OPKO HEALTH |
| MELIA HOTELS vs. Arrow Electronics | MELIA HOTELS vs. PARKEN SPORT ENT | MELIA HOTELS vs. Nucletron Electronic Aktiengesellschaft | MELIA HOTELS vs. Methode Electronics |
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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..
Other Complementary Tools
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |