Correlation Between CVW CLEANTECH and Hilton Worldwide
Can any of the company-specific risk be diversified away by investing in both CVW CLEANTECH and Hilton Worldwide 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 CVW CLEANTECH and Hilton Worldwide into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between CVW CLEANTECH INC and Hilton Worldwide Holdings, you can compare the effects of market volatilities on CVW CLEANTECH and Hilton Worldwide 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 CVW CLEANTECH with a short position of Hilton Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of CVW CLEANTECH and Hilton Worldwide.
Diversification Opportunities for CVW CLEANTECH and Hilton Worldwide
0.54 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between CVW and Hilton is 0.54. Overlapping area represents the amount of risk that can be diversified away by holding CVW CLEANTECH INC and Hilton Worldwide Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Worldwide Holdings and CVW CLEANTECH 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 CVW CLEANTECH INC are associated (or correlated) with Hilton Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Worldwide Holdings has no effect on the direction of CVW CLEANTECH i.e., CVW CLEANTECH and Hilton Worldwide go up and down completely randomly.
Pair Corralation between CVW CLEANTECH and Hilton Worldwide
Assuming the 90 days trading horizon CVW CLEANTECH is expected to generate 3.55 times less return on investment than Hilton Worldwide. In addition to that, CVW CLEANTECH is 2.13 times more volatile than Hilton Worldwide Holdings. It trades about 0.02 of its total potential returns per unit of risk. Hilton Worldwide Holdings is currently generating about 0.16 per unit of volatility. If you would invest 20,547 in Hilton Worldwide Holdings on October 31, 2024 and sell it today you would earn a total of 3,633 from holding Hilton Worldwide Holdings or generate 17.68% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
CVW CLEANTECH INC vs. Hilton Worldwide Holdings
Performance |
| Timeline |
| CVW CLEANTECH INC |
| Hilton Worldwide Holdings |
CVW CLEANTECH and Hilton Worldwide Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with CVW CLEANTECH and Hilton Worldwide
The main advantage of trading using opposite CVW CLEANTECH and Hilton Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if CVW CLEANTECH position performs unexpectedly, Hilton Worldwide 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 Hilton Worldwide will offset losses from the drop in Hilton Worldwide's long position.| CVW CLEANTECH vs. EIDESVIK OFFSHORE NK | CVW CLEANTECH vs. Japan Tobacco | CVW CLEANTECH vs. Solstad Offshore ASA | CVW CLEANTECH vs. H2O Retailing |
| Hilton Worldwide vs. Molina Healthcare | Hilton Worldwide vs. MPH Health Care | Hilton Worldwide vs. TRADEGATE | Hilton Worldwide vs. SHIP HEALTHCARE HLDGINC |
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 USA ETFs module to find actively traded Exchange Traded Funds (ETF) in USA.
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