Correlation Between REGAL HOTEL and InterContinental
Can any of the company-specific risk be diversified away by investing in both REGAL 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 REGAL HOTEL and InterContinental 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 InterContinental Hotels Group, you can compare the effects of market volatilities on REGAL 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 REGAL HOTEL with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of REGAL HOTEL and InterContinental.
Diversification Opportunities for REGAL HOTEL and InterContinental
-0.4 | Correlation Coefficient |
Very good diversification
The 3 months correlation between REGAL and InterContinental is -0.4. Overlapping area represents the amount of risk that can be diversified away by holding REGAL HOTEL INTL and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental 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 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 REGAL HOTEL i.e., REGAL HOTEL and InterContinental go up and down completely randomly.
Pair Corralation between REGAL HOTEL and InterContinental
Assuming the 90 days trading horizon REGAL HOTEL INTL is expected to under-perform the InterContinental. In addition to that, REGAL HOTEL is 1.71 times more volatile than InterContinental Hotels Group. It trades about -0.03 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.16 per unit of volatility. If you would invest 9,444 in InterContinental Hotels Group on October 25, 2024 and sell it today you would earn a total of 3,056 from holding InterContinental Hotels Group or generate 32.36% 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. InterContinental Hotels Group
Performance |
| Timeline |
| REGAL HOTEL INTL |
| InterContinental Hotels |
REGAL HOTEL and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with REGAL HOTEL and InterContinental
The main advantage of trading using opposite REGAL HOTEL and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if REGAL 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.| REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc | REGAL HOTEL vs. Apple Inc |
| InterContinental vs. Ribbon Communications | InterContinental vs. US FOODS HOLDING | InterContinental vs. TYSON FOODS A | InterContinental vs. Chengdu PUTIAN Telecommunications |
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 Dashboard module to portfolio dashboard that provides centralized access to all your investments.
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