Correlation Between CODERE ONLINE and InterContinental
Can any of the company-specific risk be diversified away by investing in both CODERE ONLINE 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 CODERE ONLINE and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CODERE ONLINE LUX and InterContinental Hotels Group, you can compare the effects of market volatilities on CODERE ONLINE 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 CODERE ONLINE with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of CODERE ONLINE and InterContinental.
Diversification Opportunities for CODERE ONLINE and InterContinental
0.05 | Correlation Coefficient |
Significant diversification
The 3 months correlation between CODERE and InterContinental is 0.05. Overlapping area represents the amount of risk that can be diversified away by holding CODERE ONLINE LUX and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and CODERE ONLINE 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 CODERE ONLINE LUX 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 CODERE ONLINE i.e., CODERE ONLINE and InterContinental go up and down completely randomly.
Pair Corralation between CODERE ONLINE and InterContinental
Assuming the 90 days horizon CODERE ONLINE is expected to generate 1.57 times less return on investment than InterContinental. In addition to that, CODERE ONLINE is 2.56 times more volatile than InterContinental Hotels Group. It trades about 0.03 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.14 per unit of volatility. If you would invest 9,344 in InterContinental Hotels Group on September 2, 2024 and sell it today you would earn a total of 2,456 from holding InterContinental Hotels Group or generate 26.28% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
CODERE ONLINE LUX vs. InterContinental Hotels Group
Performance |
| Timeline |
| CODERE ONLINE LUX |
| InterContinental Hotels |
CODERE ONLINE and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CODERE ONLINE and InterContinental
The main advantage of trading using opposite CODERE ONLINE and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CODERE ONLINE 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.| CODERE ONLINE vs. Churchill Downs Incorporated | CODERE ONLINE vs. Scientific Games | CODERE ONLINE vs. International Game Technology | CODERE ONLINE vs. Superior Plus Corp |
| InterContinental vs. Micron Technology | InterContinental vs. GALENA MINING LTD | InterContinental vs. Zijin Mining Group | InterContinental vs. Vishay Intertechnology |
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 Rebalancing module to analyze risk-adjusted returns against different time horizons to find asset-allocation targets.
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