Correlation Between Binance Coin and Hilton Worldwide
Can any of the company-specific risk be diversified away by investing in both Binance Coin 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 Binance Coin and Hilton Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Binance Coin and Hilton Worldwide Holdings, you can compare the effects of market volatilities on Binance Coin 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 Binance Coin with a short position of Hilton Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of Binance Coin and Hilton Worldwide.
Diversification Opportunities for Binance Coin and Hilton Worldwide
0.64 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Binance and Hilton is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Binance Coin 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 Binance Coin 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 Binance Coin 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 Binance Coin i.e., Binance Coin and Hilton Worldwide go up and down completely randomly.
Pair Corralation between Binance Coin and Hilton Worldwide
Assuming the 90 days trading horizon Binance Coin is expected to generate 2.39 times more return on investment than Hilton Worldwide. However, Binance Coin is 2.39 times more volatile than Hilton Worldwide Holdings. It trades about 0.15 of its potential returns per unit of risk. Hilton Worldwide Holdings is currently generating about 0.02 per unit of risk. If you would invest 67,832 in Binance Coin on October 20, 2024 and sell it today you would earn a total of 4,237 from holding Binance Coin or generate 6.25% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 90.91% |
| Values | Daily Returns |
Binance Coin vs. Hilton Worldwide Holdings
Performance |
| Timeline |
| Binance Coin |
| Hilton Worldwide Holdings |
Binance Coin and Hilton Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Binance Coin and Hilton Worldwide
The main advantage of trading using opposite Binance Coin and Hilton Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Binance Coin 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.| Binance Coin vs. Staked Ether | Binance Coin vs. Cronos | Binance Coin vs. Wrapped Bitcoin | Binance Coin vs. Monero |
| Hilton Worldwide vs. Hyatt Hotels | Hilton Worldwide vs. Wyndham Hotels Resorts | Hilton Worldwide vs. Choice Hotels International | Hilton Worldwide vs. InterContinental Hotels Group |
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 Alpha Finder module to use alpha and beta coefficients to find investment opportunities after accounting for the risk.
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