Correlation Between InterContinental and Infrastrutture Wireless
Can any of the company-specific risk be diversified away by investing in both InterContinental and Infrastrutture Wireless 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 Infrastrutture Wireless 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 Infrastrutture Wireless Italiane, you can compare the effects of market volatilities on InterContinental and Infrastrutture Wireless 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 Infrastrutture Wireless. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Infrastrutture Wireless.
Diversification Opportunities for InterContinental and Infrastrutture Wireless
-0.89 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterContinental and Infrastrutture is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Infrastrutture Wireless Italia in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infrastrutture Wireless 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 Infrastrutture Wireless. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infrastrutture Wireless has no effect on the direction of InterContinental i.e., InterContinental and Infrastrutture Wireless go up and down completely randomly.
Pair Corralation between InterContinental and Infrastrutture Wireless
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.82 times more return on investment than Infrastrutture Wireless. However, InterContinental Hotels Group is 1.22 times less risky than Infrastrutture Wireless. It trades about 0.55 of its potential returns per unit of risk. Infrastrutture Wireless Italiane is currently generating about -0.15 per unit of risk. If you would invest 847,400 in InterContinental Hotels Group on September 3, 2024 and sell it today you would earn a total of 132,600 from holding InterContinental Hotels Group or generate 15.65% 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. Infrastrutture Wireless Italia
Performance |
| Timeline |
| InterContinental Hotels |
| Infrastrutture Wireless |
InterContinental and Infrastrutture Wireless Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Infrastrutture Wireless
The main advantage of trading using opposite InterContinental and Infrastrutture Wireless positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Infrastrutture Wireless 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 Infrastrutture Wireless will offset losses from the drop in Infrastrutture Wireless' long position.| InterContinental vs. Rockfire Resources plc | InterContinental vs. Tlou Energy | InterContinental vs. Falcon Oil Gas | InterContinental vs. Helium One Global |
| Infrastrutture Wireless vs. Catalyst Media Group | Infrastrutture Wireless vs. CATLIN GROUP | Infrastrutture Wireless vs. Magnora ASA | Infrastrutture Wireless vs. RTW Venture Fund |
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 Performance Analysis module to check effects of mean-variance optimization against your current asset allocation.
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