Correlation Between Hilton Worldwide and ATT
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and ATT 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 ATT 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 ATT Inc, you can compare the effects of market volatilities on Hilton Worldwide and ATT 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 ATT. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and ATT.
Diversification Opportunities for Hilton Worldwide and ATT
0.82 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hilton and ATT is 0.82. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and ATT Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on ATT Inc 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 ATT. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of ATT Inc has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and ATT go up and down completely randomly.
Pair Corralation between Hilton Worldwide and ATT
Considering the 90-day investment horizon Hilton Worldwide is expected to generate 3.61 times less return on investment than ATT. But when comparing it to its historical volatility, Hilton Worldwide Holdings is 1.34 times less risky than ATT. It trades about 0.07 of its potential returns per unit of risk. ATT Inc is currently generating about 0.18 of returns per unit of risk over similar time horizon. If you would invest 2,231 in ATT Inc on September 12, 2024 and sell it today you would earn a total of 120.00 from holding ATT Inc or generate 5.38% 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. ATT Inc
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| ATT Inc |
Hilton Worldwide and ATT Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and ATT
The main advantage of trading using opposite Hilton Worldwide and ATT positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, ATT 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 ATT will offset losses from the drop in ATT'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 |
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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 Efficient Frontier module to plot and analyze your portfolio and positions against risk-return landscape of the market..
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