Correlation Between Hilton Worldwide and Discover Financial
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Discover Financial 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 Discover Financial 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 Discover Financial Services, you can compare the effects of market volatilities on Hilton Worldwide and Discover Financial 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 Discover Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Discover Financial.
Diversification Opportunities for Hilton Worldwide and Discover Financial
0.93 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hilton and Discover is 0.93. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Discover Financial Services in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Discover Financial 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 Discover Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Discover Financial has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Discover Financial go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Discover Financial
Considering the 90-day investment horizon Hilton Worldwide is expected to generate 1.03 times less return on investment than Discover Financial. But when comparing it to its historical volatility, Hilton Worldwide Holdings is 1.78 times less risky than Discover Financial. It trades about 0.12 of its potential returns per unit of risk. Discover Financial Services is currently generating about 0.07 of returns per unit of risk over similar time horizon. If you would invest 9,223 in Discover Financial Services on September 12, 2024 and sell it today you would earn a total of 8,352 from holding Discover Financial Services or generate 90.56% 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. Discover Financial Services
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Discover Financial |
Hilton Worldwide and Discover Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Discover Financial
The main advantage of trading using opposite Hilton Worldwide and Discover Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Discover Financial 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 Discover Financial will offset losses from the drop in Discover Financial'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 |
| Discover Financial vs. Victory Integrity Smallmid Cap | Discover Financial vs. Hilton Worldwide Holdings | Discover Financial vs. NVIDIA | Discover Financial 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 Top Crypto Exchanges module to search and analyze digital assets across top global cryptocurrency exchanges.
Other Complementary Tools
| Funds Screener Find actively-traded funds from around the world traded on over 30 global exchanges | |
| Portfolio Volatility Check portfolio volatility and analyze historical return density to properly model market risk | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| ETF Categories List of ETF categories grouped based on various criteria, such as the investment strategy or type of investments |