Correlation Between Hilton Worldwide and HealthCare
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and HealthCare 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 HealthCare 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 HealthCare, you can compare the effects of market volatilities on Hilton Worldwide and HealthCare 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 HealthCare. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and HealthCare.
Diversification Opportunities for Hilton Worldwide and HealthCare
-0.54 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hilton and HealthCare is -0.54. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and HealthCare in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HealthCare 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 HealthCare. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HealthCare has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and HealthCare go up and down completely randomly.
Pair Corralation between Hilton Worldwide and HealthCare
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.96 times more return on investment than HealthCare. However, Hilton Worldwide Holdings is 1.04 times less risky than HealthCare. It trades about 0.24 of its potential returns per unit of risk. HealthCare is currently generating about -0.23 per unit of risk. If you would invest 24,716 in Hilton Worldwide Holdings on November 1, 2024 and sell it today you would earn a total of 1,036 from holding Hilton Worldwide Holdings or generate 4.19% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 95.0% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. HealthCare
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| HealthCare |
Hilton Worldwide and HealthCare Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and HealthCare
The main advantage of trading using opposite Hilton Worldwide and HealthCare positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, HealthCare 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 HealthCare will offset losses from the drop in HealthCare'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 |
| HealthCare vs. The Joint Corp | HealthCare vs. LENSAR Inc | HealthCare vs. Cardinal Health | HealthCare vs. Merit Medical Systems |
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.
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