Correlation Between INTERCONT HOTELS and H World
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and H World 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 INTERCONT HOTELS and H World into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and H World Group, you can compare the effects of market volatilities on INTERCONT HOTELS and H World 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 INTERCONT HOTELS with a short position of H World. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and H World.
Diversification Opportunities for INTERCONT HOTELS and H World
-0.37 | Correlation Coefficient |
Very good diversification
The 3 months correlation between INTERCONT and CL4A is -0.37. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and H World Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on H World Group and INTERCONT HOTELS 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 INTERCONT HOTELS are associated (or correlated) with H World. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of H World Group has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and H World go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and H World
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.55 times more return on investment than H World. However, INTERCONT HOTELS is 1.81 times less risky than H World. It trades about 0.2 of its potential returns per unit of risk. H World Group is currently generating about 0.09 per unit of risk. If you would invest 9,450 in INTERCONT HOTELS on September 23, 2024 and sell it today you would earn a total of 2,550 from holding INTERCONT HOTELS or generate 26.98% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
INTERCONT HOTELS vs. H World Group
Performance |
Timeline |
INTERCONT HOTELS |
H World Group |
INTERCONT HOTELS and H World Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with INTERCONT HOTELS and H World
The main advantage of trading using opposite INTERCONT HOTELS and H World positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, H World 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 H World will offset losses from the drop in H World's long position.INTERCONT HOTELS vs. Marriott International | INTERCONT HOTELS vs. Hilton Worldwide Holdings | INTERCONT HOTELS vs. H World Group | INTERCONT HOTELS vs. Hyatt Hotels |
H World vs. Marriott International | H World vs. Hilton Worldwide Holdings | H World vs. Hyatt Hotels | H World vs. InterContinental Hotels Group |
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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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