Correlation Between Hilton Worldwide and Imperial Oil
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Imperial Oil 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 Imperial Oil 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 Imperial Oil, you can compare the effects of market volatilities on Hilton Worldwide and Imperial Oil 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 Imperial Oil. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Imperial Oil.
Diversification Opportunities for Hilton Worldwide and Imperial Oil
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hilton and Imperial is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Imperial Oil in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Imperial Oil 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 Imperial Oil. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Imperial Oil has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Imperial Oil go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Imperial Oil
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.73 times more return on investment than Imperial Oil. However, Hilton Worldwide Holdings is 1.38 times less risky than Imperial Oil. It trades about 0.12 of its potential returns per unit of risk. Imperial Oil is currently generating about 0.06 per unit of risk. If you would invest 12,509 in Hilton Worldwide Holdings on September 12, 2024 and sell it today you would earn a total of 12,863 from holding Hilton Worldwide Holdings or generate 102.83% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. Imperial Oil
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Imperial Oil |
Hilton Worldwide and Imperial Oil Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Imperial Oil
The main advantage of trading using opposite Hilton Worldwide and Imperial Oil positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Imperial Oil 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 Imperial Oil will offset losses from the drop in Imperial Oil'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 |
| Imperial Oil vs. Victory Integrity Smallmid Cap | Imperial Oil vs. Hilton Worldwide Holdings | Imperial Oil vs. NVIDIA | Imperial Oil 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 Commodity Channel module to use Commodity Channel Index to analyze current equity momentum.
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