Correlation Between InterContinental and FullNet Communications

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Can any of the company-specific risk be diversified away by investing in both InterContinental and FullNet Communications 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 FullNet Communications 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 FullNet Communications, you can compare the effects of market volatilities on InterContinental and FullNet Communications 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 FullNet Communications. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and FullNet Communications.

Diversification Opportunities for InterContinental and FullNet Communications

0.14
  Correlation Coefficient

Average diversification

The 3 months correlation between InterContinental and FullNet is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and FullNet Communications in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on FullNet Communications 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 FullNet Communications. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of FullNet Communications has no effect on the direction of InterContinental i.e., InterContinental and FullNet Communications go up and down completely randomly.

Pair Corralation between InterContinental and FullNet Communications

If you would invest  42.00  in FullNet Communications on December 29, 2023 and sell it today you would earn a total of  0.00  from holding FullNet Communications or generate 0.0% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthInsignificant
Accuracy4.55%
ValuesDaily Returns

InterContinental Hotels Group  vs.  FullNet Communications

 Performance 
       Timeline  
InterContinental Hotels 

Risk-Adjusted Performance

13 of 100

 
Low
 
High
Good
Compared to the overall equity markets, risk-adjusted returns on investments in InterContinental Hotels Group are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly inconsistent technical indicators, InterContinental reported solid returns over the last few months and may actually be approaching a breakup point.
FullNet Communications 

Risk-Adjusted Performance

0 of 100

 
Low
 
High
Very Weak
Over the last 90 days FullNet Communications has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of very healthy essential indicators, FullNet Communications is not utilizing all of its potentials. The latest stock price disarray, may contribute to short-term losses for the investors.

InterContinental and FullNet Communications Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with InterContinental and FullNet Communications

The main advantage of trading using opposite InterContinental and FullNet Communications positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, FullNet Communications 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 FullNet Communications will offset losses from the drop in FullNet Communications' long position.
The idea behind InterContinental Hotels Group and FullNet Communications 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 Watchlist Optimization module to optimize watchlists to build efficient portfolios or rebalance existing positions based on the mean-variance optimization algorithm.

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