Correlation Between InterContinental and Cleanaway Waste
Can any of the company-specific risk be diversified away by investing in both InterContinental and Cleanaway Waste 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 Cleanaway Waste 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 Cleanaway Waste Management, you can compare the effects of market volatilities on InterContinental and Cleanaway Waste 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 Cleanaway Waste. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Cleanaway Waste.
Diversification Opportunities for InterContinental and Cleanaway Waste
0.26 | Correlation Coefficient |
Modest diversification
The 3 months correlation between InterContinental and Cleanaway is 0.26. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Cleanaway Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cleanaway Waste Mana 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 Cleanaway Waste. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cleanaway Waste Mana has no effect on the direction of InterContinental i.e., InterContinental and Cleanaway Waste go up and down completely randomly.
Pair Corralation between InterContinental and Cleanaway Waste
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.91 times more return on investment than Cleanaway Waste. However, InterContinental Hotels Group is 1.1 times less risky than Cleanaway Waste. It trades about 0.35 of its potential returns per unit of risk. Cleanaway Waste Management is currently generating about 0.18 per unit of risk. If you would invest 10,300 in InterContinental Hotels Group on August 29, 2024 and sell it today you would earn a total of 1,400 from holding InterContinental Hotels Group or generate 13.59% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 95.65% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Cleanaway Waste Management
Performance |
| Timeline |
| InterContinental Hotels |
| Cleanaway Waste Mana |
InterContinental and Cleanaway Waste Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Cleanaway Waste
The main advantage of trading using opposite InterContinental and Cleanaway Waste positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Cleanaway Waste 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 Cleanaway Waste will offset losses from the drop in Cleanaway Waste's long position.| InterContinental vs. Cleanaway Waste Management | InterContinental vs. USWE SPORTS AB | InterContinental vs. Ming Le Sports | InterContinental vs. Waste Management |
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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 Competition Analyzer module to analyze and compare many basic indicators for a group of related or unrelated entities.
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