Correlation Between Marriott International and Intergroup
Can any of the company-specific risk be diversified away by investing in both Marriott International and Intergroup 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 Marriott International and Intergroup into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriott International and The Intergroup, you can compare the effects of market volatilities on Marriott International and Intergroup 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 Marriott International with a short position of Intergroup. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriott International and Intergroup.
Diversification Opportunities for Marriott International and Intergroup
-0.21 | Correlation Coefficient |
Very good diversification
The 3 months correlation between Marriott and Intergroup is -0.21. Overlapping area represents the amount of risk that can be diversified away by holding Marriott International and The Intergroup in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Intergroup and Marriott International 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 Marriott International are associated (or correlated) with Intergroup. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Intergroup has no effect on the direction of Marriott International i.e., Marriott International and Intergroup go up and down completely randomly.
Pair Corralation between Marriott International and Intergroup
Considering the 90-day investment horizon Marriott International is expected to under-perform the Intergroup. But the stock apears to be less risky and, when comparing its historical volatility, Marriott International is 3.19 times less risky than Intergroup. The stock trades about -0.2 of its potential returns per unit of risk. The The Intergroup is currently generating about 0.01 of returns per unit of risk over similar time horizon. If you would invest 2,087 in The Intergroup on February 1, 2024 and sell it today you would lose (24.00) from holding The Intergroup or give up 1.15% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
Marriott International vs. The Intergroup
Performance |
Timeline |
Marriott International |
Intergroup |
Marriott International and Intergroup Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Marriott International and Intergroup
The main advantage of trading using opposite Marriott International and Intergroup positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriott International position performs unexpectedly, Intergroup 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 Intergroup will offset losses from the drop in Intergroup's long position.Marriott International vs. Yatra Online | Marriott International vs. Despegar Corp | Marriott International vs. Mondee Holdings | Marriott International vs. MakeMyTrip Limited |
Intergroup vs. Huazhu Group | Intergroup vs. Atour Lifestyle Holdings | Intergroup vs. LuxUrban Hotels | Intergroup vs. InterContinental Hotels Group |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
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