Correlation Between Hilton Worldwide and Gencor Industries
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Gencor Industries 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 Gencor Industries 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 Gencor Industries, you can compare the effects of market volatilities on Hilton Worldwide and Gencor Industries 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 Gencor Industries. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Gencor Industries.
Diversification Opportunities for Hilton Worldwide and Gencor Industries
0.86 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hilton and Gencor is 0.86. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Gencor Industries in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gencor Industries 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 Gencor Industries. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gencor Industries has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Gencor Industries go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Gencor Industries
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.49 times more return on investment than Gencor Industries. However, Hilton Worldwide Holdings is 2.06 times less risky than Gencor Industries. It trades about 0.17 of its potential returns per unit of risk. Gencor Industries is currently generating about 0.07 per unit of risk. If you would invest 23,762 in Hilton Worldwide Holdings on September 13, 2024 and sell it today you would earn a total of 2,036 from holding Hilton Worldwide Holdings or generate 8.57% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. Gencor Industries
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Gencor Industries |
Hilton Worldwide and Gencor Industries Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Gencor Industries
The main advantage of trading using opposite Hilton Worldwide and Gencor Industries positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Gencor Industries 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 Gencor Industries will offset losses from the drop in Gencor Industries' long position.| Hilton Worldwide vs. Yatra Online | Hilton Worldwide vs. Despegar Corp | Hilton Worldwide vs. Mondee Holdings | Hilton Worldwide vs. MakeMyTrip Limited |
| Gencor Industries vs. Alamo Group | Gencor Industries vs. Manitowoc | Gencor Industries vs. Manitex International | Gencor Industries vs. Columbus McKinnon |
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 Pattern Recognition module to use different Pattern Recognition models to time the market across multiple global exchanges.
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