Correlation Between InterContinental and VITEC SOFTWARE
Can any of the company-specific risk be diversified away by investing in both InterContinental and VITEC SOFTWARE 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 InterContinental and VITEC SOFTWARE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between InterContinental Hotels Group and VITEC SOFTWARE GROUP, you can compare the effects of market volatilities on InterContinental and VITEC SOFTWARE 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 InterContinental with a short position of VITEC SOFTWARE. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and VITEC SOFTWARE.
Diversification Opportunities for InterContinental and VITEC SOFTWARE
-0.15 | Correlation Coefficient |
Good diversification
The 3 months correlation between InterContinental and VITEC is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and VITEC SOFTWARE GROUP in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on VITEC SOFTWARE GROUP and InterContinental 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 InterContinental Hotels Group are associated (or correlated) with VITEC SOFTWARE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of VITEC SOFTWARE GROUP has no effect on the direction of InterContinental i.e., InterContinental and VITEC SOFTWARE go up and down completely randomly.
Pair Corralation between InterContinental and VITEC SOFTWARE
Assuming the 90 days trading horizon InterContinental is expected to generate 1.83 times less return on investment than VITEC SOFTWARE. In addition to that, InterContinental is 1.12 times more volatile than VITEC SOFTWARE GROUP. It trades about 0.17 of its total potential returns per unit of risk. VITEC SOFTWARE GROUP is currently generating about 0.36 per unit of volatility. If you would invest 3,984 in VITEC SOFTWARE GROUP on September 20, 2024 and sell it today you would earn a total of 472.00 from holding VITEC SOFTWARE GROUP or generate 11.85% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
InterContinental Hotels Group vs. VITEC SOFTWARE GROUP
Performance |
Timeline |
InterContinental Hotels |
VITEC SOFTWARE GROUP |
InterContinental and VITEC SOFTWARE Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with InterContinental and VITEC SOFTWARE
The main advantage of trading using opposite InterContinental and VITEC SOFTWARE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, VITEC SOFTWARE 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 VITEC SOFTWARE will offset losses from the drop in VITEC SOFTWARE's long position.InterContinental vs. VULCAN MATERIALS | InterContinental vs. SENECA FOODS A | InterContinental vs. Rayonier Advanced Materials | InterContinental vs. GOODYEAR T RUBBER |
VITEC SOFTWARE vs. CSSC Offshore Marine | VITEC SOFTWARE vs. Tsingtao Brewery | VITEC SOFTWARE vs. THAI BEVERAGE | VITEC SOFTWARE vs. JJ SNACK FOODS |
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 Portfolio Optimization module to compute new portfolio that will generate highest expected return given your specified tolerance for risk.
Other Complementary Tools
Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
Portfolio Analyzer Portfolio analysis module that provides access to portfolio diagnostics and optimization engine | |
Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. | |
Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk | |
Money Flow Index Determine momentum by analyzing Money Flow Index and other technical indicators |