Correlation Between Hilton Worldwide and Shangri-La Asia
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Shangri-La Asia 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 Shangri-La Asia 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 Shangri La Asia Limited, you can compare the effects of market volatilities on Hilton Worldwide and Shangri-La Asia 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 Shangri-La Asia. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Shangri-La Asia.
Diversification Opportunities for Hilton Worldwide and Shangri-La Asia
0.7 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hilton and Shangri-La is 0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Shangri La Asia Limited in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Shangri La Asia 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 Shangri-La Asia. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Shangri La Asia has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Shangri-La Asia go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Shangri-La Asia
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.62 times more return on investment than Shangri-La Asia. However, Hilton Worldwide Holdings is 1.61 times less risky than Shangri-La Asia. It trades about 0.17 of its potential returns per unit of risk. Shangri La Asia Limited is currently generating about 0.03 per unit of risk. If you would invest 19,790 in Hilton Worldwide Holdings on September 1, 2024 and sell it today you would earn a total of 5,554 from holding Hilton Worldwide Holdings or generate 28.06% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 96.83% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. Shangri La Asia Limited
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Shangri La Asia |
Hilton Worldwide and Shangri-La Asia Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Shangri-La Asia
The main advantage of trading using opposite Hilton Worldwide and Shangri-La Asia positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Shangri-La Asia 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 Shangri-La Asia will offset losses from the drop in Shangri-La Asia'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 |
| Shangri-La Asia vs. Marriott International | Shangri-La Asia vs. Hilton Worldwide Holdings | Shangri-La Asia vs. InterContinental Hotels Group | Shangri-La Asia vs. InterContinental Hotels Group |
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 Financial Widgets module to easily integrated Macroaxis content with over 30 different plug-and-play financial widgets.
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