Correlation Between Hilton Grand and Marriott International
Can any of the company-specific risk be diversified away by investing in both Hilton Grand and Marriott International 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 Hilton Grand and Marriott International into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilton Grand Vacations and Marriott International, you can compare the effects of market volatilities on Hilton Grand and Marriott International 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 Hilton Grand with a short position of Marriott International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Grand and Marriott International.
Diversification Opportunities for Hilton Grand and Marriott International
0.66 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hilton and Marriott is 0.66. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Grand Vacations and Marriott International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Marriott International and Hilton Grand 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 Hilton Grand Vacations are associated (or correlated) with Marriott International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Marriott International has no effect on the direction of Hilton Grand i.e., Hilton Grand and Marriott International go up and down completely randomly.
Pair Corralation between Hilton Grand and Marriott International
Considering the 90-day investment horizon Hilton Grand Vacations is expected to generate 1.27 times more return on investment than Marriott International. However, Hilton Grand is 1.27 times more volatile than Marriott International. It trades about 0.22 of its potential returns per unit of risk. Marriott International is currently generating about 0.24 per unit of risk. If you would invest 3,838 in Hilton Grand Vacations on August 27, 2024 and sell it today you would earn a total of 380.00 from holding Hilton Grand Vacations or generate 9.9% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Grand Vacations vs. Marriott International
Performance |
| Timeline |
| Hilton Grand Vacations |
| Marriott International |
Hilton Grand and Marriott International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Grand and Marriott International
The main advantage of trading using opposite Hilton Grand and Marriott International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Grand position performs unexpectedly, Marriott International 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 Marriott International will offset losses from the drop in Marriott International's long position.| Hilton Grand vs. Vail Resorts | Hilton Grand vs. Monarch Casino Resort | Hilton Grand vs. Playa Hotels Resorts | Hilton Grand vs. Studio City International |
| Marriott International vs. Hyatt Hotels | Marriott International vs. InterContinental Hotels Group | Marriott International vs. Choice Hotels International | Marriott International vs. Wyndham Hotels Resorts |
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 Portfolio Analyzer module to portfolio analysis module that provides access to portfolio diagnostics and optimization engine.
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