Correlation Between InterContinental and Sligro Food
Can any of the company-specific risk be diversified away by investing in both InterContinental and Sligro Food 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 Sligro Food 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 Sligro Food Group, you can compare the effects of market volatilities on InterContinental and Sligro Food 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 Sligro Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Sligro Food.
Diversification Opportunities for InterContinental and Sligro Food
-0.93 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterContinental and Sligro is -0.93. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Sligro Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Sligro Food Group 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 Sligro Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Sligro Food Group has no effect on the direction of InterContinental i.e., InterContinental and Sligro Food go up and down completely randomly.
Pair Corralation between InterContinental and Sligro Food
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.95 times more return on investment than Sligro Food. However, InterContinental Hotels Group is 1.06 times less risky than Sligro Food. It trades about 0.2 of its potential returns per unit of risk. Sligro Food Group is currently generating about -0.24 per unit of risk. If you would invest 937,400 in InterContinental Hotels Group on September 12, 2024 and sell it today you would earn a total of 38,400 from holding InterContinental Hotels Group or generate 4.1% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Sligro Food Group
Performance |
| Timeline |
| InterContinental Hotels |
| Sligro Food Group |
InterContinental and Sligro Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Sligro Food
The main advantage of trading using opposite InterContinental and Sligro Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Sligro Food 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 Sligro Food will offset losses from the drop in Sligro Food's long position.| InterContinental vs. National Atomic Co | InterContinental vs. OTP Bank Nyrt | InterContinental vs. Samsung Electronics Co | InterContinental vs. Samsung Electronics Co |
| Sligro Food vs. Primary Health Properties | Sligro Food vs. Deltex Medical Group | Sligro Food vs. CompuGroup Medical AG | Sligro Food vs. Abingdon Health Plc |
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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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