Correlation Between InterContinental and Chocoladefabriken
Can any of the company-specific risk be diversified away by investing in both InterContinental and Chocoladefabriken 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 Chocoladefabriken 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 Chocoladefabriken Lindt Spruengli, you can compare the effects of market volatilities on InterContinental and Chocoladefabriken 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 Chocoladefabriken. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Chocoladefabriken.
Diversification Opportunities for InterContinental and Chocoladefabriken
-0.9 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterContinental and Chocoladefabriken is -0.9. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Chocoladefabriken Lindt Spruen in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chocoladefabriken Lindt 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 Chocoladefabriken. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chocoladefabriken Lindt has no effect on the direction of InterContinental i.e., InterContinental and Chocoladefabriken go up and down completely randomly.
Pair Corralation between InterContinental and Chocoladefabriken
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 1.23 times more return on investment than Chocoladefabriken. However, InterContinental is 1.23 times more volatile than Chocoladefabriken Lindt Spruengli. It trades about 0.12 of its potential returns per unit of risk. Chocoladefabriken Lindt Spruengli is currently generating about 0.02 per unit of risk. If you would invest 492,414 in InterContinental Hotels Group on August 31, 2024 and sell it today you would earn a total of 486,786 from holding InterContinental Hotels Group or generate 98.86% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 97.71% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Chocoladefabriken Lindt Spruen
Performance |
| Timeline |
| InterContinental Hotels |
| Chocoladefabriken Lindt |
InterContinental and Chocoladefabriken Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Chocoladefabriken
The main advantage of trading using opposite InterContinental and Chocoladefabriken positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Chocoladefabriken 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 Chocoladefabriken will offset losses from the drop in Chocoladefabriken's long position.| InterContinental vs. STMicroelectronics NV | InterContinental vs. Vulcan Materials Co | InterContinental vs. Zoom Video Communications | InterContinental vs. LPKF Laser Electronics |
| Chocoladefabriken vs. Neometals | Chocoladefabriken vs. Coor Service Management | Chocoladefabriken vs. Aeorema Communications Plc | Chocoladefabriken vs. JLEN Environmental Assets |
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 Transaction History module to view history of all your transactions and understand their impact on performance.
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