Correlation Between Roebuck Food and InterContinental
Can any of the company-specific risk be diversified away by investing in both Roebuck Food 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 Roebuck Food and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Roebuck Food Group and InterContinental Hotels Group, you can compare the effects of market volatilities on Roebuck Food 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 Roebuck Food with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Roebuck Food and InterContinental.
Diversification Opportunities for Roebuck Food and InterContinental
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Roebuck and InterContinental is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Roebuck Food Group and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Roebuck Food 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 Roebuck Food Group 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 Roebuck Food i.e., Roebuck Food and InterContinental go up and down completely randomly.
Pair Corralation between Roebuck Food and InterContinental
If you would invest 848,000 in InterContinental Hotels Group on September 12, 2024 and sell it today you would earn a total of 127,800 from holding InterContinental Hotels Group or generate 15.07% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Roebuck Food Group vs. InterContinental Hotels Group
Performance |
| Timeline |
| Roebuck Food Group |
| InterContinental Hotels |
Roebuck Food and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Roebuck Food and InterContinental
The main advantage of trading using opposite Roebuck Food and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Roebuck Food 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.| Roebuck Food vs. Hong Kong Land | Roebuck Food vs. Neometals | Roebuck Food vs. Coor Service Management | Roebuck Food vs. Fidelity Sustainable USD |
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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 Odds Of Bankruptcy module to get analysis of equity chance of financial distress in the next 2 years.
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