Correlation Between INTERCONT HOTELS and FUTURE GAMING

Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and FUTURE GAMING 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 FUTURE GAMING into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between INTERCONT HOTELS and FUTURE GAMING GRP, you can compare the effects of market volatilities on INTERCONT HOTELS and FUTURE GAMING 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 FUTURE GAMING. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and FUTURE GAMING.

Diversification Opportunities for INTERCONT HOTELS and FUTURE GAMING

-0.73

Correlation Coefficient

INTERCONT HOTELS  FUTURE GAMING

Pay attention - limited upside

The 3 months correlation between INTERCONT and FUTURE is -0.73. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and FUTURE GAMING GRP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FUTURE GAMING GRP 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 FUTURE GAMING. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FUTURE GAMING GRP has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and FUTURE GAMING go up and down completely randomly.

Pair Corralation between INTERCONT HOTELS and FUTURE GAMING

Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 0.26 times more return on investment than FUTURE GAMING. However, INTERCONT HOTELS is 3.79 times less risky than FUTURE GAMING. It trades about 0.11 of its potential returns per unit of risk. FUTURE GAMING GRP is currently generating about 0.02 per unit of risk. If you would invest  5,038  in INTERCONT HOTELS on September 24, 2024 and sell it today you would earn a total of  6,962  from holding INTERCONT HOTELS or generate 138.19% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Weak
Accuracy	99.8%
Values	Daily Returns

INTERCONT HOTELS  vs.  FUTURE GAMING GRP

INTERCONT HOTELS

Risk-Adjusted Performance

14 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INTERCONT HOTELS are ranked lower than 14 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, INTERCONT HOTELS reported solid returns over the last few months and may actually be approaching a breakup point.

FUTURE GAMING GRP

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days FUTURE GAMING GRP has generated negative risk-adjusted returns adding no value to investors with long positions. Despite fragile performance in the last few months, the Stock's basic indicators remain nearly stable which may send shares a bit higher in January 2025. The current disturbance may also be a sign of long-run up-swing for the company stockholders.

Pair Trading with INTERCONT HOTELS and FUTURE GAMING

The main advantage of trading using opposite INTERCONT HOTELS and FUTURE GAMING positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, FUTURE GAMING 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 FUTURE GAMING will offset losses from the drop in FUTURE GAMING's long position.

The idea behind INTERCONT HOTELS and FUTURE GAMING GRP pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Portfolio Dashboard module to portfolio dashboard that provides centralized access to all your investments.