Correlation Between InterContinental and Iron Mountain
Can any of the company-specific risk be diversified away by investing in both InterContinental and Iron Mountain 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 Iron Mountain 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 Iron Mountain, you can compare the effects of market volatilities on InterContinental and Iron Mountain 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 Iron Mountain. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Iron Mountain.
Diversification Opportunities for InterContinental and Iron Mountain
0.39 | Correlation Coefficient |
Weak diversification
The 3 months correlation between InterContinental and Iron is 0.39. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Iron Mountain in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Iron Mountain 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 Iron Mountain. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Iron Mountain has no effect on the direction of InterContinental i.e., InterContinental and Iron Mountain go up and down completely randomly.
Pair Corralation between InterContinental and Iron Mountain
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.53 times more return on investment than Iron Mountain. However, InterContinental Hotels Group is 1.9 times less risky than Iron Mountain. It trades about 0.47 of its potential returns per unit of risk. Iron Mountain is currently generating about 0.01 per unit of risk. If you would invest 856,200 in InterContinental Hotels Group on September 1, 2024 and sell it today you would earn a total of 123,800 from holding InterContinental Hotels Group or generate 14.46% 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. Iron Mountain
Performance |
| Timeline |
| InterContinental Hotels |
| Iron Mountain |
InterContinental and Iron Mountain Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Iron Mountain
The main advantage of trading using opposite InterContinental and Iron Mountain positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Iron Mountain 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 Iron Mountain will offset losses from the drop in Iron Mountain's long position.| InterContinental vs. FC Investment Trust | InterContinental vs. Ross Stores | InterContinental vs. Monks Investment Trust | InterContinental vs. The Mercantile Investment |
| Iron Mountain vs. Herald Investment Trust | Iron Mountain vs. Odyssean Investment Trust | Iron Mountain vs. JD Sports Fashion | Iron Mountain vs. New Residential Investment |
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 Price Exposure Probability module to analyze equity upside and downside potential for a given time horizon across multiple markets.
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