Correlation Between InterContinental and Mitchells Butlers
Can any of the company-specific risk be diversified away by investing in both InterContinental and Mitchells Butlers 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 Mitchells Butlers 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 Mitchells Butlers PLC, you can compare the effects of market volatilities on InterContinental and Mitchells Butlers 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 Mitchells Butlers. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Mitchells Butlers.
Diversification Opportunities for InterContinental and Mitchells Butlers
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterContinental and Mitchells is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Mitchells Butlers PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitchells Butlers PLC 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 Mitchells Butlers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitchells Butlers PLC has no effect on the direction of InterContinental i.e., InterContinental and Mitchells Butlers go up and down completely randomly.
Pair Corralation between InterContinental and Mitchells Butlers
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.79 times more return on investment than Mitchells Butlers. However, InterContinental Hotels Group is 1.26 times less risky than Mitchells Butlers. It trades about 0.27 of its potential returns per unit of risk. Mitchells Butlers PLC is currently generating about 0.15 per unit of risk. If you would invest 943,600 in InterContinental Hotels Group on September 14, 2024 and sell it today you would earn a total of 54,800 from holding InterContinental Hotels Group or generate 5.81% 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. Mitchells Butlers PLC
Performance |
| Timeline |
| InterContinental Hotels |
| Mitchells Butlers PLC |
InterContinental and Mitchells Butlers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Mitchells Butlers
The main advantage of trading using opposite InterContinental and Mitchells Butlers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Mitchells Butlers 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 Mitchells Butlers will offset losses from the drop in Mitchells Butlers' long position.| InterContinental vs. FC Investment Trust | InterContinental vs. Monks Investment Trust | InterContinental vs. Auto Trader Group | InterContinental vs. Oakley Capital Investments |
| Mitchells Butlers vs. European Metals Holdings | Mitchells Butlers vs. METALL ZUG AG | Mitchells Butlers vs. Melia Hotels | Mitchells Butlers 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 Idea Breakdown module to analyze constituents of all Macroaxis ideas. Macroaxis investment ideas are predefined, sector-focused investing themes.
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