Correlation Between InterContinental and Interactive Strength

Can any of the company-specific risk be diversified away by investing in both InterContinental and Interactive Strength 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 Interactive Strength 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 Interactive Strength Common, you can compare the effects of market volatilities on InterContinental and Interactive Strength 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 Interactive Strength. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Interactive Strength.

Diversification Opportunities for InterContinental and Interactive Strength

-0.89

Correlation Coefficient

InterContinental  Interactive Strength

Pay attention - limited upside

The 3 months correlation between InterContinental and Interactive is -0.89. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Interactive Strength Common in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Interactive Strength 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 Interactive Strength. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Interactive Strength has no effect on the direction of InterContinental i.e., InterContinental and Interactive Strength go up and down completely randomly.

Pair Corralation between InterContinental and Interactive Strength

Considering the 90-day investment horizon InterContinental Hotels Group is expected to generate 0.08 times more return on investment than Interactive Strength. However, InterContinental Hotels Group is 12.31 times less risky than Interactive Strength. It trades about 0.17 of its potential returns per unit of risk. Interactive Strength Common is currently generating about -0.13 per unit of risk. If you would invest  11,303  in InterContinental Hotels Group on October 21, 2024 and sell it today you would earn a total of  1,379  from holding InterContinental Hotels Group or generate 12.2% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

InterContinental Hotels Group  vs.  Interactive Strength Common

InterContinental Hotels

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in InterContinental Hotels Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly uncertain technical indicators, InterContinental may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Interactive Strength

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Interactive Strength Common has generated negative risk-adjusted returns adding no value to investors with long positions. Even with weak performance in the last few months, the Stock's basic indicators remain relatively invariable which may send shares a bit higher in February 2025. The latest agitation may also be a sign of long-running up-swing for the enterprise retail investors.

Pair Trading with InterContinental and Interactive Strength

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

The idea behind InterContinental Hotels Group and Interactive Strength Common 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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.