Correlation Between Hilton Worldwide and Hongkong
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Hongkong 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 Worldwide and Hongkong into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilton Worldwide Holdings and The Hongkong and, you can compare the effects of market volatilities on Hilton Worldwide and Hongkong 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 Worldwide with a short position of Hongkong. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Hongkong.
Diversification Opportunities for Hilton Worldwide and Hongkong
0.4 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hilton and Hongkong is 0.4. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and The Hongkong and in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on The Hongkong and Hilton Worldwide 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 Worldwide Holdings are associated (or correlated) with Hongkong. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of The Hongkong has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Hongkong go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Hongkong
Assuming the 90 days trading horizon Hilton Worldwide Holdings is expected to under-perform the Hongkong. But the stock apears to be less risky and, when comparing its historical volatility, Hilton Worldwide Holdings is 1.7 times less risky than Hongkong. The stock trades about -0.17 of its potential returns per unit of risk. The The Hongkong and is currently generating about 0.1 of returns per unit of risk over similar time horizon. If you would invest 73.00 in The Hongkong and on October 11, 2024 and sell it today you would earn a total of 2.00 from holding The Hongkong and or generate 2.74% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. The Hongkong and
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| The Hongkong |
Hilton Worldwide and Hongkong Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Hongkong
The main advantage of trading using opposite Hilton Worldwide and Hongkong positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Hongkong 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 Hongkong will offset losses from the drop in Hongkong's long position.| Hilton Worldwide vs. Marriott International | Hilton Worldwide vs. Hyatt Hotels | Hilton Worldwide vs. InterContinental Hotels Group | Hilton Worldwide vs. INTERCONT HOTELS |
| Hongkong vs. Semiconductor Manufacturing International | Hongkong vs. AEON METALS LTD | Hongkong vs. Elmos Semiconductor SE | Hongkong vs. ON SEMICONDUCTOR |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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