Correlation Between VULCAN MATERIALS and InterContinental
Can any of the company-specific risk be diversified away by investing in both VULCAN MATERIALS 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 VULCAN MATERIALS and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between VULCAN MATERIALS and InterContinental Hotels Group, you can compare the effects of market volatilities on VULCAN MATERIALS 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 VULCAN MATERIALS with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of VULCAN MATERIALS and InterContinental.
Diversification Opportunities for VULCAN MATERIALS and InterContinental
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between VULCAN and InterContinental is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding VULCAN MATERIALS and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and VULCAN MATERIALS 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 VULCAN MATERIALS 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 VULCAN MATERIALS i.e., VULCAN MATERIALS and InterContinental go up and down completely randomly.
Pair Corralation between VULCAN MATERIALS and InterContinental
Assuming the 90 days trading horizon VULCAN MATERIALS is expected to generate 33.4 times less return on investment than InterContinental. But when comparing it to its historical volatility, VULCAN MATERIALS is 1.22 times less risky than InterContinental. It trades about 0.01 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.17 of returns per unit of risk over similar time horizon. If you would invest 11,400 in InterContinental Hotels Group on September 20, 2024 and sell it today you would earn a total of 700.00 from holding InterContinental Hotels Group or generate 6.14% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
VULCAN MATERIALS vs. InterContinental Hotels Group
Performance |
| Timeline |
| VULCAN MATERIALS |
| InterContinental Hotels |
VULCAN MATERIALS and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with VULCAN MATERIALS and InterContinental
The main advantage of trading using opposite VULCAN MATERIALS and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if VULCAN MATERIALS 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.| VULCAN MATERIALS vs. ZURICH INSURANCE GROUP | VULCAN MATERIALS vs. Insurance Australia Group | VULCAN MATERIALS vs. HANOVER INSURANCE | VULCAN MATERIALS vs. PTT Global Chemical |
| InterContinental vs. VULCAN MATERIALS | InterContinental vs. SENECA FOODS A | InterContinental vs. Rayonier Advanced Materials | InterContinental vs. GOODYEAR T RUBBER |
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 Price Transformation module to use Price Transformation models to analyze the depth of different equity instruments across global markets.
Other Complementary Tools
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Global Markets Map Get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes | |
| Piotroski F Score Get Piotroski F Score based on the binary analysis strategy of nine different fundamentals | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Bonds Directory Find actively traded corporate debentures issued by US companies |