Correlation Between InterContinental and Schweiter Technologies
Can any of the company-specific risk be diversified away by investing in both InterContinental and Schweiter Technologies 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 Schweiter Technologies 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 Schweiter Technologies AG, you can compare the effects of market volatilities on InterContinental and Schweiter Technologies 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 Schweiter Technologies. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Schweiter Technologies.
Diversification Opportunities for InterContinental and Schweiter Technologies
0.2 | Correlation Coefficient |
Modest diversification
The 3 months correlation between InterContinental and Schweiter is 0.2. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Schweiter Technologies AG in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Schweiter Technologies 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 Schweiter Technologies. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Schweiter Technologies has no effect on the direction of InterContinental i.e., InterContinental and Schweiter Technologies go up and down completely randomly.
Pair Corralation between InterContinental and Schweiter Technologies
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.49 times more return on investment than Schweiter Technologies. However, InterContinental Hotels Group is 2.04 times less risky than Schweiter Technologies. It trades about 0.31 of its potential returns per unit of risk. Schweiter Technologies AG is currently generating about 0.04 per unit of risk. If you would invest 774,600 in InterContinental Hotels Group on September 12, 2024 and sell it today you would earn a total of 201,200 from holding InterContinental Hotels Group or generate 25.97% 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. Schweiter Technologies AG
Performance |
| Timeline |
| InterContinental Hotels |
| Schweiter Technologies |
InterContinental and Schweiter Technologies Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Schweiter Technologies
The main advantage of trading using opposite InterContinental and Schweiter Technologies positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Schweiter Technologies 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 Schweiter Technologies will offset losses from the drop in Schweiter Technologies' long position.| InterContinental vs. National Atomic Co | InterContinental vs. OTP Bank Nyrt | InterContinental vs. Samsung Electronics Co | InterContinental vs. Samsung Electronics Co |
| Schweiter Technologies vs. Hong Kong Land | Schweiter Technologies vs. Neometals | Schweiter Technologies vs. Coor Service Management | Schweiter Technologies vs. Fidelity Sustainable USD |
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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.
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