Correlation Between INTERCONT HOTELS and Waste Management
Can any of the company-specific risk be diversified away by investing in both INTERCONT HOTELS and Waste Management 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 Waste Management into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between INTERCONT HOTELS and Waste Management, you can compare the effects of market volatilities on INTERCONT HOTELS and Waste Management 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 Waste Management. Check out your portfolio center. Please also check ongoing floating volatility patterns of INTERCONT HOTELS and Waste Management.
Diversification Opportunities for INTERCONT HOTELS and Waste Management
0.27 | Correlation Coefficient |
Modest diversification
The 3 months correlation between INTERCONT and Waste is 0.27. Overlapping area represents the amount of risk that can be diversified away by holding INTERCONT HOTELS and Waste Management in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Waste Management 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 Waste Management. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Waste Management has no effect on the direction of INTERCONT HOTELS i.e., INTERCONT HOTELS and Waste Management go up and down completely randomly.
Pair Corralation between INTERCONT HOTELS and Waste Management
Assuming the 90 days trading horizon INTERCONT HOTELS is expected to generate 2.67 times less return on investment than Waste Management. In addition to that, INTERCONT HOTELS is 1.38 times more volatile than Waste Management. It trades about 0.02 of its total potential returns per unit of risk. Waste Management is currently generating about 0.06 per unit of volatility. If you would invest 21,339 in Waste Management on December 2, 2024 and sell it today you would earn a total of 786.00 from holding Waste Management or generate 3.68% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Very Weak |
Accuracy | 100.0% |
Values | Daily Returns |
INTERCONT HOTELS vs. Waste Management
Performance |
Timeline |
INTERCONT HOTELS |
Waste Management |
INTERCONT HOTELS and Waste Management Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with INTERCONT HOTELS and Waste Management
The main advantage of trading using opposite INTERCONT HOTELS and Waste Management positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if INTERCONT HOTELS position performs unexpectedly, Waste Management 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 Waste Management will offset losses from the drop in Waste Management's long position.INTERCONT HOTELS vs. Packaging of | INTERCONT HOTELS vs. ERSTE GP BNK | INTERCONT HOTELS vs. W R Berkley | INTERCONT HOTELS vs. News Corporation |
Waste Management vs. Hitachi Construction Machinery | Waste Management vs. Japan Medical Dynamic | Waste Management vs. AGRICULTBK HADR25 YC | Waste Management vs. Apyx Medical Corp |
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 Bonds Directory module to find actively traded corporate debentures issued by US companies.
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