Correlation Between Packagingof America and INTERCONT HOTELS
Can any of the company-specific risk be diversified away by investing in both Packagingof America 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 Packagingof America and INTERCONT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Packaging of and INTERCONT HOTELS, you can compare the effects of market volatilities on Packagingof America 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 Packagingof America with a short position of INTERCONT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of Packagingof America and INTERCONT HOTELS.
Diversification Opportunities for Packagingof America and INTERCONT HOTELS
0.97 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Packagingof and INTERCONT is 0.97. Overlapping area represents the amount of risk that can be diversified away by holding Packaging of and INTERCONT HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERCONT HOTELS and Packagingof America 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 Packaging of 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 Packagingof America i.e., Packagingof America and INTERCONT HOTELS go up and down completely randomly.
Pair Corralation between Packagingof America and INTERCONT HOTELS
Assuming the 90 days horizon Packagingof America is expected to generate 1.11 times less return on investment than INTERCONT HOTELS. But when comparing it to its historical volatility, Packaging of is 1.42 times less risky than INTERCONT HOTELS. It trades about 0.14 of its potential returns per unit of risk. INTERCONT HOTELS is currently generating about 0.11 of returns per unit of risk over similar time horizon. If you would invest 6,732 in INTERCONT HOTELS on August 25, 2024 and sell it today you would earn a total of 4,668 from holding INTERCONT HOTELS or generate 69.34% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Packaging of vs. INTERCONT HOTELS
Performance |
| Timeline |
| Packagingof America |
| INTERCONT HOTELS |
Packagingof America and INTERCONT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Packagingof America and INTERCONT HOTELS
The main advantage of trading using opposite Packagingof America and INTERCONT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Packagingof America 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.| Packagingof America vs. AptarGroup | Packagingof America vs. Superior Plus Corp | Packagingof America vs. NMI Holdings | Packagingof America vs. Origin Agritech |
| 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 Idea Optimizer module to use advanced portfolio builder with pre-computed micro ideas to build optimal portfolio .
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