Correlation Between InterContinental and SPARTAN STORES
Can any of the company-specific risk be diversified away by investing in both InterContinental and SPARTAN STORES 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 SPARTAN STORES 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 SPARTAN STORES, you can compare the effects of market volatilities on InterContinental and SPARTAN STORES 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 SPARTAN STORES. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and SPARTAN STORES.
Diversification Opportunities for InterContinental and SPARTAN STORES
-0.71 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterContinental and SPARTAN is -0.71. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and SPARTAN STORES in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on SPARTAN STORES 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 SPARTAN STORES. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of SPARTAN STORES has no effect on the direction of InterContinental i.e., InterContinental and SPARTAN STORES go up and down completely randomly.
Pair Corralation between InterContinental and SPARTAN STORES
Assuming the 90 days trading horizon InterContinental is expected to generate 1.38 times less return on investment than SPARTAN STORES. In addition to that, InterContinental is 1.07 times more volatile than SPARTAN STORES. It trades about 0.18 of its total potential returns per unit of risk. SPARTAN STORES is currently generating about 0.26 per unit of volatility. If you would invest 1,699 in SPARTAN STORES on September 13, 2024 and sell it today you would earn a total of 151.00 from holding SPARTAN STORES or generate 8.89% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. SPARTAN STORES
Performance |
| Timeline |
| InterContinental Hotels |
| SPARTAN STORES |
InterContinental and SPARTAN STORES Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and SPARTAN STORES
The main advantage of trading using opposite InterContinental and SPARTAN STORES positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, SPARTAN STORES 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 SPARTAN STORES will offset losses from the drop in SPARTAN STORES's long position.| InterContinental vs. Hyatt Hotels | InterContinental vs. INTERCONT HOTELS | InterContinental vs. Wyndham Hotels Resorts | InterContinental vs. Choice Hotels International |
| SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc | SPARTAN STORES vs. Apple Inc |
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 Sectors module to list of equity sectors categorizing publicly traded companies based on their primary business activities.
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