Correlation Between Trainline Plc and InterContinental
Can any of the company-specific risk be diversified away by investing in both Trainline Plc 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 Trainline Plc and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Trainline Plc and InterContinental Hotels Group, you can compare the effects of market volatilities on Trainline Plc 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 Trainline Plc with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Trainline Plc and InterContinental.
Diversification Opportunities for Trainline Plc and InterContinental
0.9 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Trainline and InterContinental is 0.9. Overlapping area represents the amount of risk that can be diversified away by holding Trainline Plc and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Trainline Plc 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 Trainline Plc 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 Trainline Plc i.e., Trainline Plc and InterContinental go up and down completely randomly.
Pair Corralation between Trainline Plc and InterContinental
Assuming the 90 days trading horizon Trainline Plc is expected to generate 1.61 times less return on investment than InterContinental. In addition to that, Trainline Plc is 2.05 times more volatile than InterContinental Hotels Group. It trades about 0.04 of its total potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.12 per unit of volatility. If you would invest 473,607 in InterContinental Hotels Group on September 2, 2024 and sell it today you would earn a total of 506,393 from holding InterContinental Hotels Group or generate 106.92% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Trainline Plc vs. InterContinental Hotels Group
Performance |
| Timeline |
| Trainline Plc |
| InterContinental Hotels |
Trainline Plc and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Trainline Plc and InterContinental
The main advantage of trading using opposite Trainline Plc and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Trainline Plc 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.| Trainline Plc vs. Ithaca Energy PLC | Trainline Plc vs. SANTANDER UK 10 | Trainline Plc vs. Coor Service Management | Trainline Plc vs. Franklin FTSE Brazil |
| InterContinental vs. Sligro Food Group | InterContinental vs. Hilton Food Group | InterContinental vs. Leroy Seafood Group | InterContinental vs. Summit Materials Cl |
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
| Money Managers Screen money managers from public funds and ETFs managed around the world | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Balance Of Power Check stock momentum by analyzing Balance Of Power indicator and other technical ratios | |
| Premium Stories Follow Macroaxis premium stories from verified contributors across different equity types, categories and coverage scope | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum |