Correlation Between EHEALTH and InterContinental
Can any of the company-specific risk be diversified away by investing in both EHEALTH 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 EHEALTH and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between EHEALTH and InterContinental Hotels Group, you can compare the effects of market volatilities on EHEALTH 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 EHEALTH with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of EHEALTH and InterContinental.
Diversification Opportunities for EHEALTH and InterContinental
0.58 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between EHEALTH and InterContinental is 0.58. Overlapping area represents the amount of risk that can be diversified away by holding EHEALTH and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and EHEALTH 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 EHEALTH 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 EHEALTH i.e., EHEALTH and InterContinental go up and down completely randomly.
Pair Corralation between EHEALTH and InterContinental
Assuming the 90 days trading horizon EHEALTH is expected to generate 3.1 times more return on investment than InterContinental. However, EHEALTH is 3.1 times more volatile than InterContinental Hotels Group. It trades about 0.32 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.08 per unit of risk. If you would invest 763.00 in EHEALTH on October 20, 2024 and sell it today you would earn a total of 181.00 from holding EHEALTH or generate 23.72% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Weak |
Accuracy | 100.0% |
Values | Daily Returns |
EHEALTH vs. InterContinental Hotels Group
Performance |
Timeline |
EHEALTH |
InterContinental Hotels |
EHEALTH and InterContinental Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with EHEALTH and InterContinental
The main advantage of trading using opposite EHEALTH and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if EHEALTH 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.EHEALTH vs. Nippon Light Metal | EHEALTH vs. GWILLI FOOD | EHEALTH vs. Austevoll Seafood ASA | EHEALTH vs. ADRIATIC METALS LS 013355 |
InterContinental vs. GRIFFIN MINING LTD | InterContinental vs. Forsys Metals Corp | InterContinental vs. ADRIATIC METALS LS 013355 | InterContinental vs. Perseus Mining Limited |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
Other Complementary Tools
Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
Portfolio Anywhere Track or share privately all of your investments from the convenience of any device | |
Price Ceiling Movement Calculate and plot Price Ceiling Movement for different equity instruments | |
Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
Bonds Directory Find actively traded corporate debentures issued by US companies |