Correlation Between E Home and Hilton Worldwide
Can any of the company-specific risk be diversified away by investing in both E Home 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 E Home and Hilton Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between E Home Household Service and Hilton Worldwide Holdings, you can compare the effects of market volatilities on E Home 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 E Home with a short position of Hilton Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Home and Hilton Worldwide.
Diversification Opportunities for E Home and Hilton Worldwide
-0.32 | Correlation Coefficient |
Very good diversification
The 3 months correlation between EJH and Hilton is -0.32. Overlapping area represents the amount of risk that can be diversified away by holding E Home Household Service 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 E Home 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 E Home Household Service 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 E Home i.e., E Home and Hilton Worldwide go up and down completely randomly.
Pair Corralation between E Home and Hilton Worldwide
Considering the 90-day investment horizon E Home Household Service is expected to under-perform the Hilton Worldwide. In addition to that, E Home is 8.53 times more volatile than Hilton Worldwide Holdings. It trades about -0.05 of its total potential returns per unit of risk. Hilton Worldwide Holdings is currently generating about 0.1 per unit of volatility. If you would invest 13,568 in Hilton Worldwide Holdings on December 6, 2024 and sell it today you would earn a total of 11,544 from holding Hilton Worldwide Holdings or generate 85.08% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
E Home Household Service vs. Hilton Worldwide Holdings
Performance |
| Timeline |
| E Home Household |
| Hilton Worldwide Holdings |
E Home and Hilton Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with E Home and Hilton Worldwide
The main advantage of trading using opposite E Home and Hilton Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Home 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.| E Home vs. Smart Share Global | E Home vs. WW International | E Home vs. Frontdoor | E Home vs. Carriage Services |
| 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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