Correlation Between InterContinental and Hongkong
Can any of the company-specific risk be diversified away by investing in both InterContinental and Hongkong 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 Hongkong 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 The Hongkong And, you can compare the effects of market volatilities on InterContinental and Hongkong 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 Hongkong. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Hongkong.
Diversification Opportunities for InterContinental and Hongkong
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between InterContinental and Hongkong is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and The Hongkong And in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hongkong And 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 Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hongkong And has no effect on the direction of InterContinental i.e., InterContinental and Hongkong go up and down completely randomly.
Pair Corralation between InterContinental and Hongkong
Considering the 90-day investment horizon InterContinental Hotels Group is expected to generate 0.39 times more return on investment than Hongkong. However, InterContinental Hotels Group is 2.57 times less risky than Hongkong. It trades about 0.12 of its potential returns per unit of risk. The Hongkong And is currently generating about 0.04 per unit of risk. If you would invest 8,593 in InterContinental Hotels Group on September 3, 2024 and sell it today you would earn a total of 4,057 from holding InterContinental Hotels Group or generate 47.21% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 31.17% |
| Values | Daily Returns |
InterContinental Hotels Group vs. The Hongkong And
Performance |
| Timeline |
| InterContinental Hotels |
| Hongkong And |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
InterContinental and Hongkong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and Hongkong
The main advantage of trading using opposite InterContinental and Hongkong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Hongkong 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 Hongkong will offset losses from the drop in Hongkong's long position.| InterContinental vs. Hyatt Hotels | InterContinental vs. Hilton Worldwide Holdings | InterContinental vs. Marriott International | InterContinental vs. Wyndham Hotels Resorts |
| Hongkong vs. Hilton Worldwide Holdings | Hongkong vs. InterContinental Hotels Group | Hongkong vs. Marriott International | Hongkong vs. Choice Hotels International |
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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.
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