Correlation Between Compania Hoteliera and Infinity Capital

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

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

Diversification Opportunities for Compania Hoteliera and Infinity Capital

0.13

Correlation Coefficient

Compania Hoteliera  Infinity Capital

Average diversification

The 3 months correlation between Compania and Infinity is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Compania Hoteliera InterContin and Infinity Capital Investments in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Infinity Capital Inv and Compania Hoteliera 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 Compania Hoteliera InterContinental are associated (or correlated) with Infinity Capital. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Infinity Capital Inv has no effect on the direction of Compania Hoteliera i.e., Compania Hoteliera and Infinity Capital go up and down completely randomly.

Pair Corralation between Compania Hoteliera and Infinity Capital

Assuming the 90 days trading horizon Compania Hoteliera InterContinental is expected to under-perform the Infinity Capital. In addition to that, Compania Hoteliera is 1.68 times more volatile than Infinity Capital Investments. It trades about -0.26 of its total potential returns per unit of risk. Infinity Capital Investments is currently generating about 0.25 per unit of volatility. If you would invest  237.00  in Infinity Capital Investments on October 7, 2024 and sell it today you would earn a total of  6.00  from holding Infinity Capital Investments or generate 2.53% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Insignificant
Accuracy	93.75%
Values	Daily Returns

Compania Hoteliera InterContin  vs.  Infinity Capital Investments

Compania Hoteliera

Risk-Adjusted Performance

0 of 100

Very 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.

Infinity Capital Inv

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Infinity Capital Investments are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable basic indicators, Infinity Capital is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Compania Hoteliera and Infinity Capital

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

The idea behind Compania Hoteliera InterContinental and Infinity Capital Investments 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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.