Correlation Between InterContinental and T Mobile
Can any of the company-specific risk be diversified away by investing in both InterContinental and T Mobile 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 T Mobile 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 T Mobile, you can compare the effects of market volatilities on InterContinental and T Mobile 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 T Mobile. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and T Mobile.
Diversification Opportunities for InterContinental and T Mobile
0.41 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between InterContinental and 0R2L is 0.41. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and T Mobile in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on T Mobile 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 T Mobile. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of T Mobile has no effect on the direction of InterContinental i.e., InterContinental and T Mobile go up and down completely randomly.
Pair Corralation between InterContinental and T Mobile
Assuming the 90 days trading horizon InterContinental is expected to generate 20.46 times less return on investment than T Mobile. But when comparing it to its historical volatility, InterContinental Hotels Group is 57.25 times less risky than T Mobile. It trades about 0.47 of its potential returns per unit of risk. T Mobile is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 22,276 in T Mobile on September 1, 2024 and sell it today you would earn a total of 2,418 from holding T Mobile or generate 10.85% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
InterContinental Hotels Group vs. T Mobile
Performance |
| Timeline |
| InterContinental Hotels |
| T Mobile |
InterContinental and T Mobile Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and T Mobile
The main advantage of trading using opposite InterContinental and T Mobile positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, T Mobile 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 T Mobile will offset losses from the drop in T Mobile's long position.| InterContinental vs. FC Investment Trust | InterContinental vs. Ross Stores | InterContinental vs. Monks Investment Trust | InterContinental vs. The Mercantile Investment |
| T Mobile vs. Intuitive Investments Group | T Mobile vs. Discover Financial Services | T Mobile vs. Bankers Investment Trust | T Mobile vs. Sydbank |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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