Correlation Between Transport International and Intercontinental
Can any of the company-specific risk be diversified away by investing in both Transport International 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 Transport International and Intercontinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Transport International Holdings and Intercontinental Exchange, you can compare the effects of market volatilities on Transport International 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 Transport International with a short position of Intercontinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Transport International and Intercontinental.
Diversification Opportunities for Transport International and Intercontinental
0.07 | Correlation Coefficient |
Significant diversification
The 3 months correlation between Transport and Intercontinental is 0.07. Overlapping area represents the amount of risk that can be diversified away by holding Transport International Holdin and Intercontinental Exchange in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intercontinental Exchange and Transport International 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 Transport International Holdings 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 Exchange has no effect on the direction of Transport International i.e., Transport International and Intercontinental go up and down completely randomly.
Pair Corralation between Transport International and Intercontinental
Assuming the 90 days horizon Transport International Holdings is expected to under-perform the Intercontinental. In addition to that, Transport International is 1.74 times more volatile than Intercontinental Exchange. It trades about 0.0 of its total potential returns per unit of risk. Intercontinental Exchange is currently generating about 0.04 per unit of volatility. If you would invest 14,526 in Intercontinental Exchange on November 3, 2024 and sell it today you would earn a total of 182.00 from holding Intercontinental Exchange or generate 1.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Transport International Holdin vs. Intercontinental Exchange
Performance |
| Timeline |
| Transport International |
| Intercontinental Exchange |
Transport International and Intercontinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Transport International and Intercontinental
The main advantage of trading using opposite Transport International and Intercontinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Transport International 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.| Transport International vs. CSX Corporation | Transport International vs. Norfolk Southern | Transport International vs. MTR Limited | Transport International vs. CRRC Limited |
| Intercontinental vs. SIVERS SEMICONDUCTORS AB | Intercontinental vs. NorAm Drilling AS | Intercontinental vs. Volkswagen AG | Intercontinental vs. Darden Restaurants |
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 Piotroski F Score module to get Piotroski F Score based on the binary analysis strategy of nine different fundamentals.
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