Correlation Between REGAL HOTEL and INTERCONT HOTELS
Can any of the company-specific risk be diversified away by investing in both REGAL HOTEL 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 REGAL HOTEL and INTERCONT HOTELS into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between REGAL HOTEL INTL and INTERCONT HOTELS, you can compare the effects of market volatilities on REGAL HOTEL 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 REGAL HOTEL with a short position of INTERCONT HOTELS. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL HOTEL and INTERCONT HOTELS.
Diversification Opportunities for REGAL HOTEL and INTERCONT HOTELS
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between REGAL and INTERCONT is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding REGAL HOTEL INTL and INTERCONT HOTELS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on INTERCONT HOTELS and REGAL 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 REGAL HOTEL INTL 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 REGAL HOTEL i.e., REGAL HOTEL and INTERCONT HOTELS go up and down completely randomly.
Pair Corralation between REGAL HOTEL and INTERCONT HOTELS
Assuming the 90 days trading horizon REGAL HOTEL INTL is expected to generate 2.63 times more return on investment than INTERCONT HOTELS. However, REGAL HOTEL is 2.63 times more volatile than INTERCONT HOTELS. It trades about 0.08 of its potential returns per unit of risk. INTERCONT HOTELS is currently generating about -0.24 per unit of risk. If you would invest 28.00 in REGAL HOTEL INTL on October 10, 2024 and sell it today you would earn a total of 1.00 from holding REGAL HOTEL INTL or generate 3.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
REGAL HOTEL INTL vs. INTERCONT HOTELS
Performance |
| Timeline |
| REGAL HOTEL INTL |
| INTERCONT HOTELS |
REGAL HOTEL and INTERCONT HOTELS Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL HOTEL and INTERCONT HOTELS
The main advantage of trading using opposite REGAL HOTEL and INTERCONT HOTELS positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL HOTEL 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.| REGAL HOTEL vs. Insteel Industries | REGAL HOTEL vs. Constellation Software | REGAL HOTEL vs. Unity Software | REGAL HOTEL vs. Magic Software Enterprises |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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