Correlation Between InterContinental and TBC Bank
Can any of the company-specific risk be diversified away by investing in both InterContinental and TBC Bank 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 TBC Bank 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 TBC Bank Group, you can compare the effects of market volatilities on InterContinental and TBC Bank 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 TBC Bank. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and TBC Bank.
Diversification Opportunities for InterContinental and TBC Bank
0.79 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InterContinental and TBC is 0.79. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and TBC Bank Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on TBC Bank 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 TBC Bank. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of TBC Bank Group has no effect on the direction of InterContinental i.e., InterContinental and TBC Bank go up and down completely randomly.
Pair Corralation between InterContinental and TBC Bank
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.64 times more return on investment than TBC Bank. However, InterContinental Hotels Group is 1.56 times less risky than TBC Bank. It trades about 0.04 of its potential returns per unit of risk. TBC Bank Group is currently generating about -0.09 per unit of risk. If you would invest 996,800 in InterContinental Hotels Group on October 16, 2024 and sell it today you would earn a total of 5,700 from holding InterContinental Hotels Group or generate 0.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
InterContinental Hotels Group vs. TBC Bank Group
Performance |
| Timeline |
| InterContinental Hotels |
| TBC Bank Group |
InterContinental and TBC Bank Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and TBC Bank
The main advantage of trading using opposite InterContinental and TBC Bank positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, TBC Bank 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 TBC Bank will offset losses from the drop in TBC Bank's long position.| InterContinental vs. Telecom Italia SpA | InterContinental vs. Cellnex Telecom SA | InterContinental vs. Odfjell Drilling | InterContinental vs. Virgin Wines UK |
| TBC Bank vs. Taiwan Semiconductor Manufacturing | TBC Bank vs. Symphony Environmental Technologies | TBC Bank vs. Advanced Medical Solutions | TBC Bank 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 Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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