Correlation Between LuxUrban Hotels and Intergroup
Can any of the company-specific risk be diversified away by investing in both LuxUrban Hotels and Intergroup 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 LuxUrban Hotels and Intergroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between LuxUrban Hotels and The Intergroup, you can compare the effects of market volatilities on LuxUrban Hotels and Intergroup 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 LuxUrban Hotels with a short position of Intergroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of LuxUrban Hotels and Intergroup.
Diversification Opportunities for LuxUrban Hotels and Intergroup
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between LuxUrban and Intergroup is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding LuxUrban Hotels and The Intergroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intergroup and LuxUrban Hotels 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 LuxUrban Hotels are associated (or correlated) with Intergroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intergroup has no effect on the direction of LuxUrban Hotels i.e., LuxUrban Hotels and Intergroup go up and down completely randomly.
Pair Corralation between LuxUrban Hotels and Intergroup
Given the investment horizon of 90 days LuxUrban Hotels is expected to under-perform the Intergroup. In addition to that, LuxUrban Hotels is 7.79 times more volatile than The Intergroup. It trades about -0.37 of its total potential returns per unit of risk. The Intergroup is currently generating about 0.04 per unit of volatility. If you would invest 1,381 in The Intergroup on August 24, 2024 and sell it today you would earn a total of 17.00 from holding The Intergroup or generate 1.23% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 95.65% |
| Values | Daily Returns |
LuxUrban Hotels vs. The Intergroup
Performance |
| Timeline |
| LuxUrban Hotels |
| Intergroup |
LuxUrban Hotels and Intergroup Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with LuxUrban Hotels and Intergroup
The main advantage of trading using opposite LuxUrban Hotels and Intergroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if LuxUrban Hotels position performs unexpectedly, Intergroup 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 Intergroup will offset losses from the drop in Intergroup's long position.| LuxUrban Hotels vs. GreenTree Hospitality Group | LuxUrban Hotels vs. InterContinental Hotels Group | LuxUrban Hotels vs. Atour Lifestyle Holdings | LuxUrban Hotels vs. Huazhu Group |
| Intergroup vs. Huazhu Group | Intergroup vs. Atour Lifestyle Holdings | Intergroup vs. LuxUrban Hotels | Intergroup vs. InterContinental Hotels Group |
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 Sign In To Macroaxis module to sign in to explore Macroaxis' wealth optimization platform and fintech modules.
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