Correlation Between Young Cos and InterContinental
Can any of the company-specific risk be diversified away by investing in both Young Cos 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 Young Cos and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Young Cos Brewery and InterContinental Hotels Group, you can compare the effects of market volatilities on Young Cos 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 Young Cos with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Young Cos and InterContinental.
Diversification Opportunities for Young Cos and InterContinental
-0.69 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Young and InterContinental is -0.69. Overlapping area represents the amount of risk that can be diversified away by holding Young Cos Brewery and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Young Cos 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 Young Cos Brewery 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 Young Cos i.e., Young Cos and InterContinental go up and down completely randomly.
Pair Corralation between Young Cos and InterContinental
Assuming the 90 days trading horizon Young Cos Brewery is expected to generate 0.74 times more return on investment than InterContinental. However, Young Cos Brewery is 1.36 times less risky than InterContinental. It trades about 0.08 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about -0.21 per unit of risk. If you would invest 57,400 in Young Cos Brewery on November 27, 2024 and sell it today you would earn a total of 1,000.00 from holding Young Cos Brewery or generate 1.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Young Cos Brewery vs. InterContinental Hotels Group
Performance |
| Timeline |
| Young Cos Brewery |
| InterContinental Hotels |
Young Cos and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Young Cos and InterContinental
The main advantage of trading using opposite Young Cos and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Young Cos 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.| Young Cos vs. Sovereign Metals | Young Cos vs. Jacquet Metal Service | Young Cos vs. Fulcrum Metals PLC | Young Cos vs. Science in Sport |
| InterContinental vs. Roebuck Food Group | InterContinental vs. Tyson Foods Cl | InterContinental vs. Premier Foods PLC | InterContinental vs. Molson Coors Beverage |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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