Correlation Between InterContinental and HR Block
Can any of the company-specific risk be diversified away by investing in both InterContinental and HR Block 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 HR Block 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 HR Block, you can compare the effects of market volatilities on InterContinental and HR Block 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 HR Block. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and HR Block.
Diversification Opportunities for InterContinental and HR Block
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterContinental and HRB is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and HR Block in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HR Block 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 HR Block. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HR Block has no effect on the direction of InterContinental i.e., InterContinental and HR Block go up and down completely randomly.
Pair Corralation between InterContinental and HR Block
Considering the 90-day investment horizon InterContinental Hotels Group is expected to generate 0.78 times more return on investment than HR Block. However, InterContinental Hotels Group is 1.29 times less risky than HR Block. It trades about 0.12 of its potential returns per unit of risk. HR Block is currently generating about 0.06 per unit of risk. If you would invest 6,000 in InterContinental Hotels Group on August 30, 2024 and sell it today you would earn a total of 6,601 from holding InterContinental Hotels Group or generate 110.02% 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. HR Block
Performance |
| Timeline |
| InterContinental Hotels |
| HR Block |
InterContinental and HR Block Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and HR Block
The main advantage of trading using opposite InterContinental and HR Block positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, HR Block 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 HR Block will offset losses from the drop in HR Block's long position.| InterContinental vs. Hilton Worldwide Holdings | InterContinental vs. Marriott International | InterContinental vs. Choice Hotels International | InterContinental vs. Wyndham Hotels Resorts |
| HR Block vs. Bright Horizons Family | HR Block vs. Service International | HR Block vs. Carriage Services | HR Block vs. Mister Car Wash |
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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
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