Correlation Between InterContinental and LuxUrban Hotels
Can any of the company-specific risk be diversified away by investing in both InterContinental and LuxUrban Hotels 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 LuxUrban Hotels 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 LuxUrban Hotels, you can compare the effects of market volatilities on InterContinental and LuxUrban Hotels 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 LuxUrban Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and LuxUrban Hotels.
Diversification Opportunities for InterContinental and LuxUrban Hotels
-0.74 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterContinental and LuxUrban is -0.74. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and LuxUrban Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on LuxUrban Hotels 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 LuxUrban Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of LuxUrban Hotels has no effect on the direction of InterContinental i.e., InterContinental and LuxUrban Hotels go up and down completely randomly.
Pair Corralation between InterContinental and LuxUrban Hotels
Considering the 90-day investment horizon InterContinental Hotels Group is expected to generate 0.1 times more return on investment than LuxUrban Hotels. However, InterContinental Hotels Group is 9.99 times less risky than LuxUrban Hotels. It trades about 0.39 of its potential returns per unit of risk. LuxUrban Hotels is currently generating about -0.26 per unit of risk. If you would invest 11,308 in InterContinental Hotels Group on August 28, 2024 and sell it today you would earn a total of 1,218 from holding InterContinental Hotels Group or generate 10.77% 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. LuxUrban Hotels
Performance |
| Timeline |
| InterContinental Hotels |
| LuxUrban Hotels |
InterContinental and LuxUrban Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with InterContinental and LuxUrban Hotels
The main advantage of trading using opposite InterContinental and LuxUrban Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, LuxUrban Hotels 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 LuxUrban Hotels will offset losses from the drop in LuxUrban Hotels' long position.| InterContinental vs. Hilton Worldwide Holdings | InterContinental vs. Marriott International | InterContinental vs. Choice Hotels International | InterContinental vs. Wyndham Hotels Resorts |
| LuxUrban Hotels vs. GreenTree Hospitality Group | LuxUrban Hotels vs. InterContinental Hotels Group | LuxUrban Hotels vs. Atour Lifestyle Holdings | LuxUrban Hotels vs. Huazhu 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 Portfolio Manager module to state of the art Portfolio Manager to monitor and improve performance of your invested capital.
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