Correlation Between INTERCONT HOTELS and NetApp
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and NetApp 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 NetApp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and NetApp Inc, you can compare the effects of market volatilities on INTERCONT HOTELS and NetApp 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 NetApp. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and NetApp.
Diversification Opportunities for INTERCONT HOTELS and NetApp
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between INTERCONT and NetApp is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and NetApp Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NetApp Inc 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 NetApp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NetApp Inc has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and NetApp go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and NetApp
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.87 times more return on investment than NetApp. However, INTERCONT HOTELS is 1.15 times less risky than NetApp. It trades about 0.19 of its potential returns per unit of risk. NetApp Inc is currently generating about 0.02 per unit of risk. If you would invest 9,550 in INTERCONT HOTELS on September 24, 2024 and sell it today you would earn a total of 2,450 from holding INTERCONT HOTELS or generate 25.65% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
INTERCONT HOTELS vs. NetApp Inc
Performance |
Timeline |
INTERCONT HOTELS |
NetApp Inc |
INTERCONT HOTELS and NetApp Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with INTERCONT HOTELS and NetApp
The main advantage of trading using opposite INTERCONT HOTELS and NetApp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, NetApp 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 NetApp will offset losses from the drop in NetApp'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 |
NetApp vs. H FARM SPA | NetApp vs. Playa Hotels Resorts | NetApp vs. TITAN MACHINERY | NetApp vs. INTERCONT HOTELS |
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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.
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