Correlation Between Hilton Worldwide and Accor SA
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Accor SA 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 Accor SA 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 Accor SA, you can compare the effects of market volatilities on Hilton Worldwide and Accor SA 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 Accor SA. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Accor SA.
Diversification Opportunities for Hilton Worldwide and Accor SA
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hilton and Accor is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Accor SA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Accor SA 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 Accor SA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Accor SA has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Accor SA go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Accor SA
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.6 times more return on investment than Accor SA. However, Hilton Worldwide Holdings is 1.67 times less risky than Accor SA. It trades about 0.23 of its potential returns per unit of risk. Accor SA is currently generating about 0.04 per unit of risk. If you would invest 21,552 in Hilton Worldwide Holdings on August 31, 2024 and sell it today you would earn a total of 3,490 from holding Hilton Worldwide Holdings or generate 16.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. Accor SA
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Accor SA |
Hilton Worldwide and Accor SA Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Accor SA
The main advantage of trading using opposite Hilton Worldwide and Accor SA positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Accor SA 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 Accor SA will offset losses from the drop in Accor SA's long position.| Hilton Worldwide vs. Hyatt Hotels | Hilton Worldwide vs. Wyndham Hotels Resorts | Hilton Worldwide vs. Choice Hotels International | Hilton Worldwide vs. InterContinental Hotels Group |
| Accor SA vs. Huazhu Group | Accor SA vs. GreenTree Hospitality Group | Accor SA vs. Soho House Co | Accor SA 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 ETF Categories module to list of ETF categories grouped based on various criteria, such as the investment strategy or type of investments.
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