Correlation Between LEWAG HOLDING and InterContinental
Can any of the company-specific risk be diversified away by investing in both LEWAG HOLDING 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 LEWAG HOLDING and InterContinental 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 InterContinental Hotels Group, you can compare the effects of market volatilities on LEWAG HOLDING 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 LEWAG HOLDING with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of LEWAG HOLDING and InterContinental.
Diversification Opportunities for LEWAG HOLDING and InterContinental
-0.85 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between LEWAG and InterContinental is -0.85. Overlapping area represents the amount of risk that can be diversified away by holding LEWAG HOLDING AG and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental 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 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 LEWAG HOLDING i.e., LEWAG HOLDING and InterContinental go up and down completely randomly.
Pair Corralation between LEWAG HOLDING and InterContinental
Assuming the 90 days trading horizon LEWAG HOLDING AG is expected to under-perform the InterContinental. In addition to that, LEWAG HOLDING is 1.18 times more volatile than InterContinental Hotels Group. It trades about -0.02 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 6,249 in InterContinental Hotels Group on September 12, 2024 and sell it today you would earn a total of 5,951 from holding InterContinental Hotels Group or generate 95.23% 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. InterContinental Hotels Group
Performance |
| Timeline |
| LEWAG HOLDING AG |
| InterContinental Hotels |
LEWAG HOLDING and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LEWAG HOLDING and InterContinental
The main advantage of trading using opposite LEWAG HOLDING and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LEWAG HOLDING 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.| LEWAG HOLDING vs. The Hanover Insurance | LEWAG HOLDING vs. Jacquet Metal Service | LEWAG HOLDING vs. HANOVER INSURANCE | LEWAG HOLDING vs. SBI Insurance Group |
| InterContinental vs. Neinor Homes SA | InterContinental vs. HomeToGo SE | InterContinental vs. DEVRY EDUCATION GRP | InterContinental vs. Adtalem Global Education |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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