Correlation Between Hilton Worldwide and Chevron Corp
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Chevron Corp 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 Chevron Corp 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 Chevron Corp, you can compare the effects of market volatilities on Hilton Worldwide and Chevron Corp 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 Chevron Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Chevron Corp.
Diversification Opportunities for Hilton Worldwide and Chevron Corp
0.92 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hilton and Chevron is 0.92. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Chevron Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Chevron Corp 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 Chevron Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Chevron Corp has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Chevron Corp go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Chevron Corp
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.98 times more return on investment than Chevron Corp. However, Hilton Worldwide Holdings is 1.02 times less risky than Chevron Corp. It trades about 0.13 of its potential returns per unit of risk. Chevron Corp is currently generating about 0.03 per unit of risk. If you would invest 21,434 in Hilton Worldwide Holdings on September 13, 2024 and sell it today you would earn a total of 4,364 from holding Hilton Worldwide Holdings or generate 20.36% 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. Chevron Corp
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Chevron Corp |
Hilton Worldwide and Chevron Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Chevron Corp
The main advantage of trading using opposite Hilton Worldwide and Chevron Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Chevron Corp 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 Chevron Corp will offset losses from the drop in Chevron Corp's long position.| Hilton Worldwide vs. Yatra Online | Hilton Worldwide vs. Despegar Corp | Hilton Worldwide vs. Mondee Holdings | Hilton Worldwide vs. MakeMyTrip Limited |
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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 Analyst Advice module to analyst recommendations and target price estimates broken down by several categories.
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