Correlation Between InterContinental and Amedeo Air
Can any of the company-specific risk be diversified away by investing in both InterContinental and Amedeo Air 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 Amedeo Air 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 Amedeo Air Four, you can compare the effects of market volatilities on InterContinental and Amedeo Air 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 Amedeo Air. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Amedeo Air.
Diversification Opportunities for InterContinental and Amedeo Air
0.81 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between InterContinental and Amedeo is 0.81. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Amedeo Air Four in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Amedeo Air Four 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 Amedeo Air. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Amedeo Air Four has no effect on the direction of InterContinental i.e., InterContinental and Amedeo Air go up and down completely randomly.
Pair Corralation between InterContinental and Amedeo Air
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.92 times more return on investment than Amedeo Air. However, InterContinental Hotels Group is 1.09 times less risky than Amedeo Air. It trades about 0.11 of its potential returns per unit of risk. Amedeo Air Four is currently generating about 0.09 per unit of risk. If you would invest 544,077 in InterContinental Hotels Group on October 13, 2024 and sell it today you would earn a total of 458,423 from holding InterContinental Hotels Group or generate 84.26% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Amedeo Air Four
Performance |
| Timeline |
| InterContinental Hotels |
| Amedeo Air Four |
InterContinental and Amedeo Air Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Amedeo Air
The main advantage of trading using opposite InterContinental and Amedeo Air positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Amedeo Air 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 Amedeo Air will offset losses from the drop in Amedeo Air's long position.| InterContinental vs. Fonix Mobile plc | InterContinental vs. Zegona Communications Plc | InterContinental vs. Hochschild Mining plc | InterContinental vs. Ecclesiastical Insurance Office |
| Amedeo Air vs. Host Hotels Resorts | Amedeo Air vs. Melia Hotels | Amedeo Air vs. Jupiter Green Investment | Amedeo Air vs. InterContinental Hotels Group |
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 Equity Forecasting module to use basic forecasting models to generate price predictions and determine price momentum.
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