Correlation Between Hilton Worldwide and HP
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and HP 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 HP 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 HP Inc, you can compare the effects of market volatilities on Hilton Worldwide and HP 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 HP. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and HP.
Diversification Opportunities for Hilton Worldwide and HP
0.55 | Correlation Coefficient |
Very weak diversification
The 3 months correlation between Hilton and HP is 0.55. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and HP Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on HP 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 HP. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of HP Inc has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and HP go up and down completely randomly.
Pair Corralation between Hilton Worldwide and HP
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.67 times more return on investment than HP. However, Hilton Worldwide Holdings is 1.48 times less risky than HP. It trades about -0.27 of its potential returns per unit of risk. HP Inc is currently generating about -0.24 per unit of risk. If you would invest 21,051 in Hilton Worldwide Holdings on January 20, 2024 and sell it today you would lose (1,169) from holding Hilton Worldwide Holdings or give up 5.55% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Weak |
| Accuracy | 95.45% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. HP Inc
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| HP Inc |
Hilton Worldwide and HP Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and HP
The main advantage of trading using opposite Hilton Worldwide and HP positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, HP 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 HP will offset losses from the drop in HP's long position.| Hilton Worldwide vs. Yatra Online | Hilton Worldwide vs. Despegar Corp | Hilton Worldwide vs. Mondee Holdings | Hilton Worldwide vs. MakeMyTrip Limited |
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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.
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