Correlation Between InterContinental and NEXANS
Can any of the company-specific risk be diversified away by investing in both InterContinental and NEXANS 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 NEXANS 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 NEXANS, you can compare the effects of market volatilities on InterContinental and NEXANS 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 NEXANS. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and NEXANS.
Diversification Opportunities for InterContinental and NEXANS
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterContinental and NEXANS is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and NEXANS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NEXANS 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 NEXANS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NEXANS has no effect on the direction of InterContinental i.e., InterContinental and NEXANS go up and down completely randomly.
Pair Corralation between InterContinental and NEXANS
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.66 times more return on investment than NEXANS. However, InterContinental Hotels Group is 1.52 times less risky than NEXANS. It trades about 0.13 of its potential returns per unit of risk. NEXANS is currently generating about 0.04 per unit of risk. If you would invest 5,187 in InterContinental Hotels Group on September 19, 2024 and sell it today you would earn a total of 6,913 from holding InterContinental Hotels Group or generate 133.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
InterContinental Hotels Group vs. NEXANS
Performance |
| Timeline |
| InterContinental Hotels |
| NEXANS |
InterContinental and NEXANS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and NEXANS
The main advantage of trading using opposite InterContinental and NEXANS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, NEXANS 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 NEXANS will offset losses from the drop in NEXANS's long position.| InterContinental vs. VULCAN MATERIALS | InterContinental vs. SENECA FOODS A | InterContinental vs. Rayonier Advanced Materials | InterContinental vs. GOODYEAR T RUBBER |
| NEXANS vs. Laureate Education | NEXANS vs. Lion One Metals | NEXANS vs. EEDUCATION ALBERT AB | NEXANS vs. InterContinental Hotels Group |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
Other Complementary Tools
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Bond Analysis Evaluate and analyze corporate bonds as a potential investment for your portfolios. | |
| Portfolio Comparator Compare the composition, asset allocations and performance of any two portfolios in your account | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios |