Correlation Between InterContinental and Accor SA
Can any of the company-specific risk be diversified away by investing in both InterContinental and Accor SA 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 Accor SA 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 Accor SA, you can compare the effects of market volatilities on InterContinental and Accor SA 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 Accor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Accor SA.
Diversification Opportunities for InterContinental and Accor SA
0.69 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InterContinental and Accor is 0.69. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Accor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor SA 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 Accor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor SA has no effect on the direction of InterContinental i.e., InterContinental and Accor SA go up and down completely randomly.
Pair Corralation between InterContinental and Accor SA
Considering the 90-day investment horizon InterContinental Hotels Group is expected to generate 0.66 times more return on investment than Accor SA. However, InterContinental Hotels Group is 1.52 times less risky than Accor SA. It trades about 0.33 of its potential returns per unit of risk. Accor SA is currently generating about 0.04 per unit of risk. If you would invest 9,906 in InterContinental Hotels Group on August 31, 2024 and sell it today you would earn a total of 2,695 from holding InterContinental Hotels Group or generate 27.21% 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. Accor SA
Performance |
| Timeline |
| InterContinental Hotels |
| Accor SA |
InterContinental and Accor SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Accor SA
The main advantage of trading using opposite InterContinental and Accor SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Accor SA 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 Accor SA will offset losses from the drop in Accor SA's long position.| InterContinental vs. Hilton Worldwide Holdings | InterContinental vs. Marriott International | InterContinental vs. Choice Hotels International | InterContinental vs. Wyndham Hotels Resorts |
| Accor SA vs. Huazhu Group | Accor SA vs. GreenTree Hospitality Group | Accor SA vs. Soho House Co | Accor SA 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 Stocks Directory module to find actively traded stocks across global markets.
Other Complementary Tools
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Instant Ratings Determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| My Watchlist Analysis Analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |