Correlation Between LEWAG HOLDING and INTERCONT HOTELS
Can any of the company-specific risk be diversified away by investing in both LEWAG HOLDING and INTERCONT 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 LEWAG HOLDING and INTERCONT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LEWAG HOLDING AG and INTERCONT HOTELS, you can compare the effects of market volatilities on LEWAG HOLDING and INTERCONT 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 LEWAG HOLDING with a short position of INTERCONT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEWAG HOLDING and INTERCONT HOTELS.
Diversification Opportunities for LEWAG HOLDING and INTERCONT HOTELS
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LEWAG and INTERCONT is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding LEWAG HOLDING AG and INTERCONT HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERCONT HOTELS and LEWAG HOLDING 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 LEWAG HOLDING AG are associated (or correlated) with INTERCONT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERCONT HOTELS has no effect on the direction of LEWAG HOLDING i.e., LEWAG HOLDING and INTERCONT HOTELS go up and down completely randomly.
Pair Corralation between LEWAG HOLDING and INTERCONT HOTELS
Assuming the 90 days trading horizon LEWAG HOLDING AG is expected to under-perform the INTERCONT HOTELS. But the stock apears to be less risky and, when comparing its historical volatility, LEWAG HOLDING AG is 1.04 times less risky than INTERCONT HOTELS. The stock trades about -0.02 of its potential returns per unit of risk. The INTERCONT HOTELS is currently generating about 0.13 of returns per unit of risk over similar time horizon. If you would invest 6,050 in INTERCONT HOTELS on September 12, 2024 and sell it today you would earn a total of 6,350 from holding INTERCONT HOTELS or generate 104.96% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 99.72% |
| Values | Daily Returns |
LEWAG HOLDING AG vs. INTERCONT HOTELS
Performance |
| Timeline |
| LEWAG HOLDING AG |
| INTERCONT HOTELS |
LEWAG HOLDING and INTERCONT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEWAG HOLDING and INTERCONT HOTELS
The main advantage of trading using opposite LEWAG HOLDING and INTERCONT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEWAG HOLDING position performs unexpectedly, INTERCONT 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 INTERCONT HOTELS will offset losses from the drop in INTERCONT HOTELS's long position.| LEWAG HOLDING vs. The Hanover Insurance | LEWAG HOLDING vs. Jacquet Metal Service | LEWAG HOLDING vs. HANOVER INSURANCE | LEWAG HOLDING vs. SBI Insurance Group |
| INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.
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