Correlation Between INTERCONT HOTELS and Freshpet

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

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

Diversification Opportunities for INTERCONT HOTELS and Freshpet

0.0

Correlation Coefficient

INTERCONT HOTELS  Freshpet

Pay attention - limited upside

The 3 months correlation between INTERCONT and Freshpet is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and Freshpet in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Freshpet 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 Freshpet. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Freshpet has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and Freshpet go up and down completely randomly.

Pair Corralation between INTERCONT HOTELS and Freshpet

If you would invest  10,200  in INTERCONT HOTELS on October 24, 2024 and sell it today you would earn a total of  2,000  from holding INTERCONT HOTELS or generate 19.61% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Flat
Strength	Insignificant
Accuracy	1.69%
Values	Daily Returns

INTERCONT HOTELS  vs.  Freshpet

INTERCONT HOTELS

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in INTERCONT HOTELS are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly weak basic indicators, INTERCONT HOTELS reported solid returns over the last few months and may actually be approaching a breakup point.

Freshpet

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Freshpet has generated negative risk-adjusted returns adding no value to investors with long positions. Despite nearly stable basic indicators, Freshpet is not utilizing all of its potentials. The current stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with INTERCONT HOTELS and Freshpet

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

The idea behind INTERCONT HOTELS and Freshpet 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.

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 Fundamentals Comparison module to compare fundamentals across multiple equities to find investing opportunities.