Correlation Between InterContinental and St Galler
Can any of the company-specific risk be diversified away by investing in both InterContinental and St Galler 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 St Galler 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 St Galler Kantonalbank, you can compare the effects of market volatilities on InterContinental and St Galler 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 St Galler. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and St Galler.
Diversification Opportunities for InterContinental and St Galler
0.51 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InterContinental and 0QQZ is 0.51. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and St Galler Kantonalbank in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on St Galler Kantonalbank 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 St Galler. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of St Galler Kantonalbank has no effect on the direction of InterContinental i.e., InterContinental and St Galler go up and down completely randomly.
Pair Corralation between InterContinental and St Galler
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 1.56 times more return on investment than St Galler. However, InterContinental is 1.56 times more volatile than St Galler Kantonalbank. It trades about 0.15 of its potential returns per unit of risk. St Galler Kantonalbank is currently generating about -0.02 per unit of risk. If you would invest 789,595 in InterContinental Hotels Group on September 1, 2024 and sell it today you would earn a total of 190,405 from holding InterContinental Hotels Group or generate 24.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 99.23% |
| Values | Daily Returns |
InterContinental Hotels Group vs. St Galler Kantonalbank
Performance |
| Timeline |
| InterContinental Hotels |
| St Galler Kantonalbank |
InterContinental and St Galler Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and St Galler
The main advantage of trading using opposite InterContinental and St Galler positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, St Galler 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 St Galler will offset losses from the drop in St Galler's long position.| InterContinental vs. FC Investment Trust | InterContinental vs. Ross Stores | InterContinental vs. Monks Investment Trust | InterContinental vs. The Mercantile Investment |
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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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.
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