Correlation Between Apple and HILTON WORLDWIDE
Can any of the company-specific risk be diversified away by investing in both Apple and HILTON WORLDWIDE 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 Apple and HILTON WORLDWIDE into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Apple Inc and HILTON WORLDWIDE HOLDINGS, you can compare the effects of market volatilities on Apple and HILTON WORLDWIDE 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 Apple with a short position of HILTON WORLDWIDE. Check out your portfolio center. Please also check ongoing floating volatility patterns of Apple and HILTON WORLDWIDE.
Diversification Opportunities for Apple and HILTON WORLDWIDE
0.89 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Apple and HILTON is 0.89. Overlapping area represents the amount of risk that can be diversified away by holding Apple Inc and HILTON WORLDWIDE HOLDINGS in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HILTON WORLDWIDE HOLDINGS and Apple 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 Apple Inc are associated (or correlated) with HILTON WORLDWIDE. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HILTON WORLDWIDE HOLDINGS has no effect on the direction of Apple i.e., Apple and HILTON WORLDWIDE go up and down completely randomly.
Pair Corralation between Apple and HILTON WORLDWIDE
Assuming the 90 days trading horizon Apple Inc is expected to generate 0.86 times more return on investment than HILTON WORLDWIDE. However, Apple Inc is 1.17 times less risky than HILTON WORLDWIDE. It trades about 0.66 of its potential returns per unit of risk. HILTON WORLDWIDE HOLDINGS is currently generating about 0.18 per unit of risk. If you would invest 20,820 in Apple Inc on September 12, 2024 and sell it today you would earn a total of 2,955 from holding Apple Inc or generate 14.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Apple Inc vs. HILTON WORLDWIDE HOLDINGS
Performance |
| Timeline |
| Apple Inc |
| HILTON WORLDWIDE HOLDINGS |
Apple and HILTON WORLDWIDE Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Apple and HILTON WORLDWIDE
The main advantage of trading using opposite Apple and HILTON WORLDWIDE positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Apple position performs unexpectedly, HILTON WORLDWIDE 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 HILTON WORLDWIDE will offset losses from the drop in HILTON WORLDWIDE's long position.| Apple vs. Molson Coors Beverage | Apple vs. FARO Technologies | Apple vs. BOSTON BEER A | Apple vs. ORMAT TECHNOLOGIES |
| HILTON WORLDWIDE vs. Check Point Software | HILTON WORLDWIDE vs. GUARDANT HEALTH CL | HILTON WORLDWIDE vs. Cardinal Health | HILTON WORLDWIDE vs. National Health Investors |
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 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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