Correlation Between InterContinental and Elixirr International

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

Diversification Opportunities for InterContinental and Elixirr International

0.78

Correlation Coefficient

InterContinental  Elixirr International

Poor diversification

The 3 months correlation between InterContinental and Elixirr is 0.78. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Elixirr International Plc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Elixirr International Plc 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 Elixirr International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Elixirr International Plc has no effect on the direction of InterContinental i.e., InterContinental and Elixirr International go up and down completely randomly.

Pair Corralation between InterContinental and Elixirr International

Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 0.58 times more return on investment than Elixirr International. However, InterContinental Hotels Group is 1.73 times less risky than Elixirr International. It trades about 0.13 of its potential returns per unit of risk. Elixirr International Plc is currently generating about 0.06 per unit of risk. If you would invest  778,000  in InterContinental Hotels Group on April 24, 2025 and sell it today you would earn a total of  88,000  from holding InterContinental Hotels Group or generate 11.31% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Together
Strength	Significant
Accuracy	100.0%
Values	Daily Returns

InterContinental Hotels Group  vs.  Elixirr International Plc

InterContinental Hotels

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in InterContinental Hotels Group are ranked lower than 9 (%) of all global equities and portfolios over the last 90 days. In spite of rather uncertain technical and fundamental indicators, InterContinental may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Elixirr International Plc

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Elixirr International Plc are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively uncertain basic indicators, Elixirr International may actually be approaching a critical reversion point that can send shares even higher in August 2025.

Pair Trading with InterContinental and Elixirr International

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

The idea behind InterContinental Hotels Group and Elixirr International Plc 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 My Watchlist Analysis module to analyze my current watchlist and to refresh optimization strategy. Macroaxis watchlist is based on self-learning algorithm to remember stocks you like.