Correlation Between InterContinental and Triad Group
Can any of the company-specific risk be diversified away by investing in both InterContinental and Triad 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 Triad 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 Triad Group PLC, you can compare the effects of market volatilities on InterContinental and Triad 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 Triad Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Triad Group.
Diversification Opportunities for InterContinental and Triad Group
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InterContinental and Triad is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Triad Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Triad Group 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 Triad Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Triad Group PLC has no effect on the direction of InterContinental i.e., InterContinental and Triad Group go up and down completely randomly.
Pair Corralation between InterContinental and Triad Group
Assuming the 90 days trading horizon InterContinental is expected to generate 1.4 times less return on investment than Triad Group. But when comparing it to its historical volatility, InterContinental Hotels Group is 1.97 times less risky than Triad Group. It trades about 0.14 of its potential returns per unit of risk. Triad Group PLC is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 13,530 in Triad Group PLC on September 12, 2024 and sell it today you would earn a total of 15,470 from holding Triad Group PLC or generate 114.34% 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. Triad Group PLC
Performance |
| Timeline |
| InterContinental Hotels |
| Triad Group PLC |
InterContinental and Triad Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Triad Group
The main advantage of trading using opposite InterContinental and Triad Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Triad 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 Triad Group will offset losses from the drop in Triad Group's long position.| InterContinental vs. National Atomic Co | InterContinental vs. OTP Bank Nyrt | InterContinental vs. Samsung Electronics Co | InterContinental vs. Samsung Electronics Co |
| Triad Group vs. Melia Hotels | Triad Group vs. Orient Telecoms | Triad Group vs. Batm Advanced Communications | Triad Group 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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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