Correlation Between InterContinental and Lundin Mining
Can any of the company-specific risk be diversified away by investing in both InterContinental and Lundin Mining 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 Lundin Mining 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 Lundin Mining Corp, you can compare the effects of market volatilities on InterContinental and Lundin Mining 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 Lundin Mining. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Lundin Mining.
Diversification Opportunities for InterContinental and Lundin Mining
0.62 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InterContinental and Lundin is 0.62. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Lundin Mining Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Lundin Mining Corp 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 Lundin Mining. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Lundin Mining Corp has no effect on the direction of InterContinental i.e., InterContinental and Lundin Mining go up and down completely randomly.
Pair Corralation between InterContinental and Lundin Mining
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.42 times more return on investment than Lundin Mining. However, InterContinental Hotels Group is 2.37 times less risky than Lundin Mining. It trades about 0.15 of its potential returns per unit of risk. Lundin Mining Corp is currently generating about 0.0 per unit of risk. If you would invest 789,794 in InterContinental Hotels Group on September 2, 2024 and sell it today you would earn a total of 190,206 from holding InterContinental Hotels Group or generate 24.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Lundin Mining Corp
Performance |
| Timeline |
| InterContinental Hotels |
| Lundin Mining Corp |
InterContinental and Lundin Mining Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Lundin Mining
The main advantage of trading using opposite InterContinental and Lundin Mining positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Lundin Mining 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 Lundin Mining will offset losses from the drop in Lundin Mining's long position.| InterContinental vs. Sligro Food Group | InterContinental vs. Hilton Food Group | InterContinental vs. Leroy Seafood Group | InterContinental vs. Summit Materials Cl |
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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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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