Correlation Between MIRAMAR HOTEL and InterContinental
Can any of the company-specific risk be diversified away by investing in both MIRAMAR HOTEL 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 MIRAMAR HOTEL and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between MIRAMAR HOTEL INV and InterContinental Hotels Group, you can compare the effects of market volatilities on MIRAMAR HOTEL 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 MIRAMAR HOTEL with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of MIRAMAR HOTEL and InterContinental.
Diversification Opportunities for MIRAMAR HOTEL and InterContinental
0.56 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between MIRAMAR and InterContinental is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding MIRAMAR HOTEL INV and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and MIRAMAR HOTEL 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 MIRAMAR HOTEL INV 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 MIRAMAR HOTEL i.e., MIRAMAR HOTEL and InterContinental go up and down completely randomly.
Pair Corralation between MIRAMAR HOTEL and InterContinental
Assuming the 90 days trading horizon MIRAMAR HOTEL INV is expected to under-perform the InterContinental. But the stock apears to be less risky and, when comparing its historical volatility, MIRAMAR HOTEL INV is 2.54 times less risky than InterContinental. The stock trades about -0.06 of its potential returns per unit of risk. The InterContinental Hotels Group is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 11,200 in InterContinental Hotels Group on September 13, 2024 and sell it today you would earn a total of 700.00 from holding InterContinental Hotels Group or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
MIRAMAR HOTEL INV vs. InterContinental Hotels Group
Performance |
| Timeline |
| MIRAMAR HOTEL INV |
| InterContinental Hotels |
MIRAMAR HOTEL and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with MIRAMAR HOTEL and InterContinental
The main advantage of trading using opposite MIRAMAR HOTEL and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if MIRAMAR HOTEL 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.| MIRAMAR HOTEL vs. UNITED RENTALS | MIRAMAR HOTEL vs. Insurance Australia Group | MIRAMAR HOTEL vs. Air Lease | MIRAMAR HOTEL vs. The Hanover Insurance |
| InterContinental vs. Hyatt Hotels | InterContinental vs. INTERCONT HOTELS | InterContinental vs. Wyndham Hotels Resorts | InterContinental vs. Choice Hotels International |
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 Portfolio Diagnostics module to use generated alerts and portfolio events aggregator to diagnose current holdings.
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