Correlation Between InterContinental and La Quinta
Can any of the company-specific risk be diversified away by investing in both InterContinental and La Quinta 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 La Quinta 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 La Quinta Holdings, you can compare the effects of market volatilities on InterContinental and La Quinta 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 La Quinta. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and La Quinta.
Diversification Opportunities for InterContinental and La Quinta
0.0 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between InterContinental and La Quinta is 0.0. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and La Quinta Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on La Quinta Holdings 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 La Quinta. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of La Quinta Holdings has no effect on the direction of InterContinental i.e., InterContinental and La Quinta go up and down completely randomly.
Pair Corralation between InterContinental and La Quinta
If you would invest 6,834 in InterContinental Hotels Group on January 26, 2024 and sell it today you would earn a total of 3,328 from holding InterContinental Hotels Group or generate 48.7% return on investment over 90 days.
Time Period | 3 Months [change] |
Direction | Flat |
Strength | Insignificant |
Accuracy | 0.0% |
Values | Daily Returns |
InterContinental Hotels Group vs. La Quinta Holdings
Performance |
Timeline |
InterContinental Hotels |
La Quinta Holdings |
Risk-Adjusted Performance
0 of 100
Weak | Strong |
Very Weak
InterContinental and La Quinta Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with InterContinental and La Quinta
The main advantage of trading using opposite InterContinental and La Quinta positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, La Quinta 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 La Quinta will offset losses from the drop in La Quinta's long position.InterContinental vs. Hilton Worldwide Holdings | InterContinental vs. Marriott International | InterContinental vs. Choice Hotels International | InterContinental vs. Wyndham Hotels Resorts |
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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 Volatility module to check portfolio volatility and analyze historical return density to properly model market risk.
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