Correlation Between InterContinental and Roebuck Food
Can any of the company-specific risk be diversified away by investing in both InterContinental and Roebuck Food 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 Roebuck Food 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 Roebuck Food Group, you can compare the effects of market volatilities on InterContinental and Roebuck Food 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 Roebuck Food. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Roebuck Food.
Diversification Opportunities for InterContinental and Roebuck Food
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InterContinental and Roebuck is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Roebuck Food Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Roebuck Food 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 Roebuck Food. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Roebuck Food Group has no effect on the direction of InterContinental i.e., InterContinental and Roebuck Food go up and down completely randomly.
Pair Corralation between InterContinental and Roebuck Food
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.79 times more return on investment than Roebuck Food. However, InterContinental Hotels Group is 1.27 times less risky than Roebuck Food. It trades about 0.14 of its potential returns per unit of risk. Roebuck Food Group is currently generating about 0.05 per unit of risk. If you would invest 525,051 in InterContinental Hotels Group on September 12, 2024 and sell it today you would earn a total of 450,749 from holding InterContinental Hotels Group or generate 85.85% 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. Roebuck Food Group
Performance |
| Timeline |
| InterContinental Hotels |
| Roebuck Food Group |
InterContinental and Roebuck Food Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Roebuck Food
The main advantage of trading using opposite InterContinental and Roebuck Food positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Roebuck Food 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 Roebuck Food will offset losses from the drop in Roebuck Food's long position.| InterContinental vs. National Atomic Co | InterContinental vs. OTP Bank Nyrt | InterContinental vs. Samsung Electronics Co | InterContinental vs. Samsung Electronics Co |
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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 Fundamental Analysis module to view fundamental data based on most recent published financial statements.
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