Correlation Between InterContinental and Phoenix Group
Can any of the company-specific risk be diversified away by investing in both InterContinental and Phoenix Group 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 Phoenix Group 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 Phoenix Group Holdings, you can compare the effects of market volatilities on InterContinental and Phoenix Group 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 Phoenix Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Phoenix Group.
Diversification Opportunities for InterContinental and Phoenix Group
-0.8 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterContinental and Phoenix is -0.8. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Phoenix Group Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Phoenix Group Holdings 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 Phoenix Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Phoenix Group Holdings has no effect on the direction of InterContinental i.e., InterContinental and Phoenix Group go up and down completely randomly.
Pair Corralation between InterContinental and Phoenix Group
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.97 times more return on investment than Phoenix Group. However, InterContinental Hotels Group is 1.03 times less risky than Phoenix Group. It trades about 0.17 of its potential returns per unit of risk. Phoenix Group Holdings is currently generating about 0.05 per unit of risk. If you would invest 769,935 in InterContinental Hotels Group on August 28, 2024 and sell it today you would earn a total of 210,065 from holding InterContinental Hotels Group or generate 27.28% 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. Phoenix Group Holdings
Performance |
| Timeline |
| InterContinental Hotels |
| Phoenix Group Holdings |
InterContinental and Phoenix Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Phoenix Group
The main advantage of trading using opposite InterContinental and Phoenix Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Phoenix Group 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 Phoenix Group will offset losses from the drop in Phoenix Group's long position.| InterContinental vs. PPHE Hotel Group | InterContinental vs. Axfood AB | InterContinental vs. Sligro Food Group | InterContinental vs. Team Internet Group |
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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 Portfolio Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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