Correlation Between InterContinental and Made Tech
Can any of the company-specific risk be diversified away by investing in both InterContinental and Made Tech 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 Made Tech 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 Made Tech Group, you can compare the effects of market volatilities on InterContinental and Made Tech 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 Made Tech. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Made Tech.
Diversification Opportunities for InterContinental and Made Tech
0.68 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InterContinental and Made is 0.68. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Made Tech Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Made Tech Group 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 Made Tech. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Made Tech Group has no effect on the direction of InterContinental i.e., InterContinental and Made Tech go up and down completely randomly.
Pair Corralation between InterContinental and Made Tech
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.26 times more return on investment than Made Tech. However, InterContinental Hotels Group is 3.82 times less risky than Made Tech. It trades about 0.12 of its potential returns per unit of risk. Made Tech Group is currently generating about 0.02 per unit of risk. If you would invest 473,607 in InterContinental Hotels Group on September 2, 2024 and sell it today you would earn a total of 506,393 from holding InterContinental Hotels Group or generate 106.92% 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. Made Tech Group
Performance |
| Timeline |
| InterContinental Hotels |
| Made Tech Group |
InterContinental and Made Tech Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Made Tech
The main advantage of trading using opposite InterContinental and Made Tech positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Made Tech 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 Made Tech will offset losses from the drop in Made Tech's long position.| InterContinental vs. Sligro Food Group | InterContinental vs. Hilton Food Group | InterContinental vs. Leroy Seafood Group | InterContinental vs. Summit Materials Cl |
| Made Tech vs. Kaufman Et Broad | Made Tech vs. EVS Broadcast Equipment | Made Tech vs. Ecclesiastical Insurance Office | Made Tech vs. Gaztransport et Technigaz |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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