Correlation Between InterContinental and Primary Health
Can any of the company-specific risk be diversified away by investing in both InterContinental and Primary Health 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 Primary Health 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 Primary Health Properties, you can compare the effects of market volatilities on InterContinental and Primary Health 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 Primary Health. Check out your portfolio center. Please also check ongoing floating volatility patterns of InterContinental and Primary Health.
Diversification Opportunities for InterContinental and Primary Health
-0.39 | Correlation Coefficient |
Very good diversification
The 3 months correlation between InterContinental and Primary is -0.39. Overlapping area represents the amount of risk that can be diversified away by holding InterContinental Hotels Group and Primary Health Properties in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Primary Health Properties 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 Primary Health. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Primary Health Properties has no effect on the direction of InterContinental i.e., InterContinental and Primary Health go up and down completely randomly.
Pair Corralation between InterContinental and Primary Health
Assuming the 90 days trading horizon InterContinental Hotels Group is expected to generate 1.32 times more return on investment than Primary Health. However, InterContinental is 1.32 times more volatile than Primary Health Properties. It trades about 0.13 of its potential returns per unit of risk. Primary Health Properties is currently generating about -0.04 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 Against |
Strength | Insignificant |
Accuracy | 100.0% |
Values | Daily Returns |
InterContinental Hotels Group vs. Primary Health Properties
Performance |
Timeline |
InterContinental Hotels |
Primary Health Properties |
InterContinental and Primary Health Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with InterContinental and Primary Health
The main advantage of trading using opposite InterContinental and Primary Health positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if InterContinental position performs unexpectedly, Primary Health 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 Primary Health will offset losses from the drop in Primary Health's long position.InterContinental vs. Capital Metals PLC | InterContinental vs. Wheaton Precious Metals | InterContinental vs. Central Asia Metals | InterContinental vs. Synthomer plc |
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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 Instant Ratings module to determine any equity ratings based on digital recommendations. Macroaxis instant equity ratings are based on combination of fundamental analysis and risk-adjusted market performance.
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