Correlation Between Intel and InterContinental
Can any of the company-specific risk be diversified away by investing in both Intel and InterContinental 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 Intel and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Intel and InterContinental Hotels Group, you can compare the effects of market volatilities on Intel and InterContinental 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 Intel with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Intel and InterContinental.
Diversification Opportunities for Intel and InterContinental
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Intel and InterContinental is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Intel and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Intel 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 Intel are associated (or correlated) with InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of Intel i.e., Intel and InterContinental go up and down completely randomly.
Pair Corralation between Intel and InterContinental
Assuming the 90 days trading horizon Intel is expected to under-perform the InterContinental. In addition to that, Intel is 2.43 times more volatile than InterContinental Hotels Group. It trades about -0.04 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.13 per unit of volatility. If you would invest 7,964 in InterContinental Hotels Group on September 4, 2024 and sell it today you would earn a total of 3,836 from holding InterContinental Hotels Group or generate 48.17% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Intel vs. InterContinental Hotels Group
Performance |
| Timeline |
| Intel |
| InterContinental Hotels |
Intel and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Intel and InterContinental
The main advantage of trading using opposite Intel and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Intel position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental's long position.| Intel vs. Altair Engineering | Intel vs. INTERCONT HOTELS | Intel vs. Playa Hotels Resorts | Intel vs. Corsair Gaming |
| InterContinental vs. Materialise NV | InterContinental vs. Mitsubishi Materials | InterContinental vs. VARIOUS EATERIES LS | InterContinental vs. Harmony Gold Mining |
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 Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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