Correlation Between InterContinental and Young Cos
Can any of the company-specific risk be diversified away by investing in both InterContinental and Young Cos 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 Young Cos 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 Young Cos Brewery, you can compare the effects of market volatilities on InterContinental and Young Cos 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 Young Cos. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Young Cos.
Diversification Opportunities for InterContinental and Young Cos
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between InterContinental and Young is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Young Cos Brewery in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Young Cos Brewery 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 Young Cos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Young Cos Brewery has no effect on the direction of InterContinental i.e., InterContinental and Young Cos go up and down completely randomly.
Pair Corralation between InterContinental and Young Cos
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.65 times more return on investment than Young Cos. However, InterContinental Hotels Group is 1.54 times less risky than Young Cos. It trades about 0.1 of its potential returns per unit of risk. Young Cos Brewery is currently generating about -0.01 per unit of risk. If you would invest 550,052 in InterContinental Hotels Group on November 27, 2024 and sell it today you would earn a total of 419,548 from holding InterContinental Hotels Group or generate 76.27% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Young Cos Brewery
Performance |
| Timeline |
| InterContinental Hotels |
| Young Cos Brewery |
InterContinental and Young Cos Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Young Cos
The main advantage of trading using opposite InterContinental and Young Cos positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Young Cos 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 Young Cos will offset losses from the drop in Young Cos' long position.| InterContinental vs. Roebuck Food Group | InterContinental vs. Tyson Foods Cl | InterContinental vs. Premier Foods PLC | InterContinental vs. Molson Coors Beverage |
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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 Companies Directory module to evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals.
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