Correlation Between InterContinental and Austevoll Seafood
Can any of the company-specific risk be diversified away by investing in both InterContinental and Austevoll Seafood 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 Austevoll Seafood 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 Austevoll Seafood ASA, you can compare the effects of market volatilities on InterContinental and Austevoll Seafood 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 Austevoll Seafood. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Austevoll Seafood.
Diversification Opportunities for InterContinental and Austevoll Seafood
0.63 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InterContinental and Austevoll is 0.63. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Austevoll Seafood ASA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Austevoll Seafood ASA 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 Austevoll Seafood. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Austevoll Seafood ASA has no effect on the direction of InterContinental i.e., InterContinental and Austevoll Seafood go up and down completely randomly.
Pair Corralation between InterContinental and Austevoll Seafood
Considering the 90-day investment horizon InterContinental Hotels Group is expected to generate 0.67 times more return on investment than Austevoll Seafood. However, InterContinental Hotels Group is 1.49 times less risky than Austevoll Seafood. It trades about 0.13 of its potential returns per unit of risk. Austevoll Seafood ASA is currently generating about 0.05 per unit of risk. If you would invest 6,760 in InterContinental Hotels Group on August 31, 2024 and sell it today you would earn a total of 5,865 from holding InterContinental Hotels Group or generate 86.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 47.59% |
| Values | Daily Returns |
InterContinental Hotels Group vs. Austevoll Seafood ASA
Performance |
| Timeline |
| InterContinental Hotels |
| Austevoll Seafood ASA |
InterContinental and Austevoll Seafood Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Austevoll Seafood
The main advantage of trading using opposite InterContinental and Austevoll Seafood positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Austevoll Seafood 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 Austevoll Seafood will offset losses from the drop in Austevoll Seafood's long position.| InterContinental vs. Hilton Worldwide Holdings | InterContinental vs. Marriott International | InterContinental vs. Choice Hotels International | InterContinental vs. Wyndham Hotels Resorts |
| Austevoll Seafood vs. Artisan Consumer Goods | Austevoll Seafood vs. Altavoz Entertainment | Austevoll Seafood vs. Avi Ltd ADR | Austevoll Seafood vs. Aryzta AG PK |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
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