Correlation Between InterContinental and MIRAMAR HOTEL
Can any of the company-specific risk be diversified away by investing in both InterContinental and MIRAMAR HOTEL 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 MIRAMAR HOTEL 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 MIRAMAR HOTEL INV, you can compare the effects of market volatilities on InterContinental and MIRAMAR HOTEL 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 MIRAMAR HOTEL. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and MIRAMAR HOTEL.
Diversification Opportunities for InterContinental and MIRAMAR HOTEL
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InterContinental and MIRAMAR is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and MIRAMAR HOTEL INV in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on MIRAMAR HOTEL INV 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 MIRAMAR HOTEL. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of MIRAMAR HOTEL INV has no effect on the direction of InterContinental i.e., InterContinental and MIRAMAR HOTEL go up and down completely randomly.
Pair Corralation between InterContinental and MIRAMAR HOTEL
Assuming the 90 days trading horizon InterContinental is expected to generate 1.12 times less return on investment than MIRAMAR HOTEL. But when comparing it to its historical volatility, InterContinental Hotels Group is 1.92 times less risky than MIRAMAR HOTEL. It trades about 0.11 of its potential returns per unit of risk. MIRAMAR HOTEL INV is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 53.00 in MIRAMAR HOTEL INV on December 4, 2024 and sell it today you would earn a total of 56.00 from holding MIRAMAR HOTEL INV or generate 105.66% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. MIRAMAR HOTEL INV
Performance |
| Timeline |
| InterContinental Hotels |
| MIRAMAR HOTEL INV |
InterContinental and MIRAMAR HOTEL Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and MIRAMAR HOTEL
The main advantage of trading using opposite InterContinental and MIRAMAR HOTEL positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, MIRAMAR HOTEL 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 MIRAMAR HOTEL will offset losses from the drop in MIRAMAR HOTEL's long position.| InterContinental vs. Chesapeake Utilities | InterContinental vs. NORTHEAST UTILITIES | InterContinental vs. Heidelberg Materials AG | InterContinental vs. Mitsubishi Materials |
| MIRAMAR HOTEL vs. Constellation Software | MIRAMAR HOTEL vs. MAGIC SOFTWARE ENTR | MIRAMAR HOTEL vs. FORMPIPE SOFTWARE AB | MIRAMAR HOTEL vs. BlueScope Steel Limited |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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