Correlation Between Hyatt Hotels and InterContinental
Can any of the company-specific risk be diversified away by investing in both Hyatt Hotels and InterContinental 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 Hyatt Hotels and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hyatt Hotels and InterContinental Hotels Group, you can compare the effects of market volatilities on Hyatt Hotels and InterContinental 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 Hyatt Hotels with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hyatt Hotels and InterContinental.
Diversification Opportunities for Hyatt Hotels and InterContinental
0.48 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hyatt and InterContinental is 0.48. Overlapping area represents the amount of risk that can be diversified away by holding Hyatt Hotels and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Hyatt 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 Hyatt Hotels are associated (or correlated) with InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of Hyatt Hotels i.e., Hyatt Hotels and InterContinental go up and down completely randomly.
Pair Corralation between Hyatt Hotels and InterContinental
Taking into account the 90-day investment horizon Hyatt Hotels is expected to generate 1.21 times more return on investment than InterContinental. However, Hyatt Hotels is 1.21 times more volatile than InterContinental Hotels Group. It trades about 0.17 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about 0.07 per unit of risk. If you would invest 12,638 in Hyatt Hotels on February 13, 2024 and sell it today you would earn a total of 2,582 from holding Hyatt Hotels or generate 20.43% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hyatt Hotels vs. InterContinental Hotels Group
Performance |
| Timeline |
| Hyatt Hotels |
| InterContinental Hotels |
Hyatt Hotels and InterContinental Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hyatt Hotels and InterContinental
The main advantage of trading using opposite Hyatt Hotels and InterContinental positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hyatt Hotels position performs unexpectedly, InterContinental 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 InterContinental will offset losses from the drop in InterContinental's long position.| Hyatt Hotels vs. Marriott International | Hyatt Hotels vs. InterContinental Hotels Group | Hyatt Hotels vs. Choice Hotels International | Hyatt Hotels vs. Wyndham Hotels Resorts |
| InterContinental vs. Hilton Worldwide Holdings | InterContinental vs. Marriott International | InterContinental vs. Choice Hotels International | InterContinental vs. Wyndham Hotels Resorts |
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 Options Analysis module to analyze and evaluate options and option chains as a potential hedge for your portfolios.
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