Correlation Between VERBUND AG and INTERCONT HOTELS
Can any of the company-specific risk be diversified away by investing in both VERBUND AG and INTERCONT HOTELS 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 VERBUND AG and INTERCONT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VERBUND AG and INTERCONT HOTELS, you can compare the effects of market volatilities on VERBUND AG and INTERCONT HOTELS 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 VERBUND AG with a short position of INTERCONT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of VERBUND AG and INTERCONT HOTELS.
Diversification Opportunities for VERBUND AG and INTERCONT HOTELS
-0.19 | Correlation Coefficient |
Good diversification
The 3 months correlation between VERBUND and INTERCONT is -0.19. Overlapping area represents the amount of risk that can be diversified away by holding VERBUND AG and INTERCONT HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERCONT HOTELS and VERBUND AG 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 VERBUND AG are associated (or correlated) with INTERCONT HOTELS. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of INTERCONT HOTELS has no effect on the direction of VERBUND AG i.e., VERBUND AG and INTERCONT HOTELS go up and down completely randomly.
Pair Corralation between VERBUND AG and INTERCONT HOTELS
Assuming the 90 days trading horizon VERBUND AG is expected to generate 22.61 times less return on investment than INTERCONT HOTELS. But when comparing it to its historical volatility, VERBUND AG is 1.3 times less risky than INTERCONT HOTELS. It trades about 0.01 of its potential returns per unit of risk. INTERCONT HOTELS is currently generating about 0.25 of returns per unit of risk over similar time horizon. If you would invest 10,100 in INTERCONT HOTELS on September 2, 2024 and sell it today you would earn a total of 1,600 from holding INTERCONT HOTELS or generate 15.84% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
VERBUND AG vs. INTERCONT HOTELS
Performance |
| Timeline |
| VERBUND AG |
| INTERCONT HOTELS |
VERBUND AG and INTERCONT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VERBUND AG and INTERCONT HOTELS
The main advantage of trading using opposite VERBUND AG and INTERCONT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VERBUND AG position performs unexpectedly, INTERCONT HOTELS 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 INTERCONT HOTELS will offset losses from the drop in INTERCONT HOTELS's long position.| VERBUND AG vs. FAST RETAIL ADR | VERBUND AG vs. FLOW TRADERS LTD | VERBUND AG vs. Apollo Medical Holdings | VERBUND AG vs. SAFETY MEDICAL PROD |
| INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
Other Complementary Tools
| Portfolio Dashboard Portfolio dashboard that provides centralized access to all your investments | |
| Latest Portfolios Quick portfolio dashboard that showcases your latest portfolios | |
| Sync Your Broker Sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors. | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Portfolio Diagnostics Use generated alerts and portfolio events aggregator to diagnose current holdings |