Correlation Between Hilton Worldwide and Synchrony Financial
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Synchrony Financial 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 Synchrony Financial 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 Synchrony Financial, you can compare the effects of market volatilities on Hilton Worldwide and Synchrony Financial 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 Synchrony Financial. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Synchrony Financial.
Diversification Opportunities for Hilton Worldwide and Synchrony Financial
0.95 | Correlation Coefficient |
Almost no diversification
The 3 months correlation between Hilton and Synchrony is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Synchrony Financial in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Synchrony Financial 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 Synchrony Financial. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Synchrony Financial has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Synchrony Financial go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Synchrony Financial
Considering the 90-day investment horizon Hilton Worldwide is expected to generate 3.11 times less return on investment than Synchrony Financial. But when comparing it to its historical volatility, Hilton Worldwide Holdings is 2.8 times less risky than Synchrony Financial. It trades about 0.17 of its potential returns per unit of risk. Synchrony Financial is currently generating about 0.19 of returns per unit of risk over similar time horizon. If you would invest 5,345 in Synchrony Financial on September 13, 2024 and sell it today you would earn a total of 1,472 from holding Synchrony Financial or generate 27.54% 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. Synchrony Financial
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Synchrony Financial |
Hilton Worldwide and Synchrony Financial Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Synchrony Financial
The main advantage of trading using opposite Hilton Worldwide and Synchrony Financial positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Synchrony Financial 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 Synchrony Financial will offset losses from the drop in Synchrony Financial's long position.| Hilton Worldwide vs. Yatra Online | Hilton Worldwide vs. Despegar Corp | Hilton Worldwide vs. Mondee Holdings | Hilton Worldwide vs. MakeMyTrip Limited |
| Synchrony Financial vs. Capital One Financial | Synchrony Financial vs. American Express | Synchrony Financial vs. Ally Financial | Synchrony Financial vs. Mastercard |
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 Directory module to find actively traded commodities issued by global exchanges.
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