Correlation Between Hilton Worldwide and Clorox
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Clorox 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 Clorox 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 Clorox, you can compare the effects of market volatilities on Hilton Worldwide and Clorox 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 Clorox. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Clorox.
Diversification Opportunities for Hilton Worldwide and Clorox
0.46 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hilton and Clorox is 0.46. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and The Clorox in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Clorox 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 Clorox. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Clorox has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Clorox go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Clorox
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.9 times more return on investment than Clorox. However, Hilton Worldwide Holdings is 1.11 times less risky than Clorox. It trades about 0.12 of its potential returns per unit of risk. The Clorox is currently generating about 0.03 per unit of risk. If you would invest 12,509 in Hilton Worldwide Holdings on September 12, 2024 and sell it today you would earn a total of 12,863 from holding Hilton Worldwide Holdings or generate 102.83% 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 Clorox
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Clorox |
Hilton Worldwide and Clorox Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Clorox
The main advantage of trading using opposite Hilton Worldwide and Clorox positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Clorox 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 Clorox will offset losses from the drop in Clorox'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 |
| Clorox vs. Victory Integrity Smallmid Cap | Clorox vs. Hilton Worldwide Holdings | Clorox vs. NVIDIA | Clorox vs. JPMorgan Chase Co |
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 Sync Your Broker module to sync your existing holdings, watchlists, positions or portfolios from thousands of online brokerage services, banks, investment account aggregators and robo-advisors..
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