Correlation Between Mondee Holdings and InterContinental

Can any of the company-specific risk be diversified away by investing in both Mondee Holdings and InterContinental 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 Mondee Holdings and InterContinental into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between Mondee Holdings and InterContinental Hotels Group, you can compare the effects of market volatilities on Mondee Holdings and InterContinental 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 Mondee Holdings with a short position of InterContinental. Check out your portfolio center. Please also check ongoing floating volatility patterns of Mondee Holdings and InterContinental.

Diversification Opportunities for Mondee Holdings and InterContinental

0.1

Correlation Coefficient

Mondee Holdings  InterContinental

Average diversification

The 3 months correlation between Mondee and InterContinental is 0.1. Overlapping area represents the amount of risk that can be diversified away by holding Mondee Holdings and InterContinental Hotels Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on InterContinental Hotels and Mondee Holdings 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 Mondee Holdings are associated (or correlated) with InterContinental. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of InterContinental Hotels has no effect on the direction of Mondee Holdings i.e., Mondee Holdings and InterContinental go up and down completely randomly.

Pair Corralation between Mondee Holdings and InterContinental

Given the investment horizon of 90 days Mondee Holdings is expected to generate 4.32 times more return on investment than InterContinental. However, Mondee Holdings is 4.32 times more volatile than InterContinental Hotels Group. It trades about 0.03 of its potential returns per unit of risk. InterContinental Hotels Group is currently generating about -0.14 per unit of risk. If you would invest  223.00  in Mondee Holdings on February 2, 2024 and sell it today you would earn a total of  2.00  from holding Mondee Holdings or generate 0.9% return on investment over 90 days.

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

Mondee Holdings  vs.  InterContinental Hotels Group

Mondee Holdings

Risk-Adjusted Performance

2 of 100

Weak

Compared to the overall equity markets, risk-adjusted returns on investments in Mondee Holdings are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. In spite of rather fragile basic indicators, Mondee Holdings may actually be approaching a critical reversion point that can send shares even higher in June 2024.

InterContinental Hotels

Risk-Adjusted Performance

4 of 100

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in InterContinental Hotels Group are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. Despite nearly stable technical indicators, InterContinental is not utilizing all of its potentials. The newest stock price disturbance, may contribute to mid-run losses for the stockholders.

Pair Trading with Mondee Holdings and InterContinental

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

The idea behind Mondee Holdings and InterContinental Hotels Group 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 CEOs Directory module to screen CEOs from public companies around the world.