Correlation Between Infinity Capital and Compania Hoteliera

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

By analyzing existing cross correlation between Infinity Capital Investments and Compania Hoteliera InterContinental, you can compare the effects of market volatilities on Infinity Capital and Compania Hoteliera 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 Infinity Capital with a short position of Compania Hoteliera. Check out your portfolio center. Please also check ongoing floating volatility patterns of Infinity Capital and Compania Hoteliera.

Diversification Opportunities for Infinity Capital and Compania Hoteliera

-0.23

Correlation Coefficient

Infinity Capital  Compania Hoteliera

Very good diversification

The 3 months correlation between Infinity and Compania is -0.23. Overlapping area represents the amount of risk that can be diversified away by holding Infinity Capital Investments and Compania Hoteliera InterContin in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Compania Hoteliera and Infinity Capital 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 Infinity Capital Investments are associated (or correlated) with Compania Hoteliera. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Compania Hoteliera has no effect on the direction of Infinity Capital i.e., Infinity Capital and Compania Hoteliera go up and down completely randomly.

Pair Corralation between Infinity Capital and Compania Hoteliera

Assuming the 90 days trading horizon Infinity Capital is expected to generate 8.5 times less return on investment than Compania Hoteliera. But when comparing it to its historical volatility, Infinity Capital Investments is 2.92 times less risky than Compania Hoteliera. It trades about 0.0 of its potential returns per unit of risk. Compania Hoteliera InterContinental is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest  23.00  in Compania Hoteliera InterContinental on December 27, 2024 and sell it today you would earn a total of  0.00  from holding Compania Hoteliera InterContinental or generate 0.0% return on investment over 90 days.

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

Infinity Capital Investments  vs.  Compania Hoteliera InterContin

Infinity Capital Inv

Risk-Adjusted Performance

Very Weak

Over the last 90 days Infinity Capital Investments has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Infinity Capital is not utilizing all of its potentials. The current stock price uproar, may contribute to short-horizon losses for the private investors.

Compania Hoteliera

Risk-Adjusted Performance

Weak

Over the last 90 days Compania Hoteliera InterContinental has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy basic indicators, Compania Hoteliera is not utilizing all of its potentials. The recent stock price disarray, may contribute to short-term losses for the investors.

Pair Trading with Infinity Capital and Compania Hoteliera

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

The idea behind Infinity Capital Investments and Compania Hoteliera InterContinental 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 ETFs module to find actively traded Exchange Traded Funds (ETF) from around the world.