Correlation Between Hilton Worldwide and American Express
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and American Express 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 American Express 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 American Express, you can compare the effects of market volatilities on Hilton Worldwide and American Express 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 American Express. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and American Express.
Diversification Opportunities for Hilton Worldwide and American Express
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hilton and American is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and American Express in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on American Express 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 American Express. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of American Express has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and American Express go up and down completely randomly.
Pair Corralation between Hilton Worldwide and American Express
Considering the 90-day investment horizon Hilton Worldwide is expected to generate 1.54 times less return on investment than American Express. But when comparing it to its historical volatility, Hilton Worldwide Holdings is 1.31 times less risky than American Express. It trades about 0.13 of its potential returns per unit of risk. American Express is currently generating about 0.15 of returns per unit of risk over similar time horizon. If you would invest 22,700 in American Express on September 13, 2024 and sell it today you would earn a total of 7,437 from holding American Express or generate 32.76% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. American Express
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| American Express |
Hilton Worldwide and American Express Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and American Express
The main advantage of trading using opposite Hilton Worldwide and American Express positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, American Express 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 American Express will offset losses from the drop in American Express' long position.| Hilton Worldwide vs. Yatra Online | Hilton Worldwide vs. Despegar Corp | Hilton Worldwide vs. Mondee Holdings | Hilton Worldwide vs. MakeMyTrip Limited |
| American Express vs. Visa Class A | American Express vs. PayPal Holdings | American Express vs. Upstart Holdings | American Express vs. Mastercard |
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 Center module to all portfolio management and optimization tools to improve performance of your portfolios.
Other Complementary Tools
| FinTech Suite Use AI to screen and filter profitable investment opportunities | |
| Portfolio Suggestion Get suggestions outside of your existing asset allocation including your own model portfolios | |
| Investing Opportunities Build portfolios using our predefined set of ideas and optimize them against your investing preferences | |
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Efficient Frontier Plot and analyze your portfolio and positions against risk-return landscape of the market. |