Correlation Between Hilton Worldwide and Vodafone Group
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Vodafone Group 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 Vodafone Group 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 Vodafone Group PLC, you can compare the effects of market volatilities on Hilton Worldwide and Vodafone Group 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 Vodafone Group. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Vodafone Group.
Diversification Opportunities for Hilton Worldwide and Vodafone Group
-0.7 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hilton and Vodafone is -0.7. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Vodafone Group PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Vodafone Group PLC 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 Vodafone Group. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Vodafone Group PLC has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Vodafone Group go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Vodafone Group
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.72 times more return on investment than Vodafone Group. However, Hilton Worldwide Holdings is 1.39 times less risky than Vodafone Group. It trades about 0.13 of its potential returns per unit of risk. Vodafone Group PLC is currently generating about 0.04 per unit of risk. If you would invest 17,799 in Hilton Worldwide Holdings on September 12, 2024 and sell it today you would earn a total of 7,896 from holding Hilton Worldwide Holdings or generate 44.36% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. Vodafone Group PLC
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Vodafone Group PLC |
Hilton Worldwide and Vodafone Group Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Vodafone Group
The main advantage of trading using opposite Hilton Worldwide and Vodafone Group positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Vodafone Group 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 Vodafone Group will offset losses from the drop in Vodafone Group's long position.| Hilton Worldwide vs. Yatra Online | Hilton Worldwide vs. Despegar Corp | Hilton Worldwide vs. Mondee Holdings | Hilton Worldwide vs. MakeMyTrip Limited |
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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 Equity Analysis module to research over 250,000 global equities including funds, stocks and ETFs to find investment opportunities.
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