Correlation Between Hilton Worldwide and Digi International
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Digi International 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 Digi International 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 Digi International, you can compare the effects of market volatilities on Hilton Worldwide and Digi International 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 Digi International. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Digi International.
Diversification Opportunities for Hilton Worldwide and Digi International
0.94 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hilton and Digi is 0.94. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Digi International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Digi International 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 Digi International. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Digi International has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Digi International go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Digi International
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.43 times more return on investment than Digi International. However, Hilton Worldwide Holdings is 2.34 times less risky than Digi International. It trades about 0.13 of its potential returns per unit of risk. Digi International is currently generating about -0.01 per unit of risk. If you would invest 14,859 in Hilton Worldwide Holdings on September 12, 2024 and sell it today you would earn a total of 10,513 from holding Hilton Worldwide Holdings or generate 70.75% 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. Digi International
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Digi International |
Hilton Worldwide and Digi International Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Digi International
The main advantage of trading using opposite Hilton Worldwide and Digi International positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Digi International 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 Digi International will offset losses from the drop in Digi International'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 |
| Digi International vs. Victory Integrity Smallmid Cap | Digi International vs. Hilton Worldwide Holdings | Digi International vs. NVIDIA | Digi International 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 Share Portfolio module to track or share privately all of your investments from the convenience of any device.
Other Complementary Tools
| Price Transformation Use Price Transformation models to analyze the depth of different equity instruments across global markets | |
| Volatility Analysis Get historical volatility and risk analysis based on latest market data | |
| Content Syndication Quickly integrate customizable finance content to your own investment portal | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| ETFs Find actively traded Exchange Traded Funds (ETF) from around the world |