Correlation Between Hilton Grand and Hyatt Hotels
Can any of the company-specific risk be diversified away by investing in both Hilton Grand and Hyatt Hotels 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 Grand and Hyatt Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Hilton Grand Vacations and Hyatt Hotels, you can compare the effects of market volatilities on Hilton Grand and Hyatt Hotels 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 Grand with a short position of Hyatt Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Grand and Hyatt Hotels.
Diversification Opportunities for Hilton Grand and Hyatt Hotels
0.8 | Correlation Coefficient |
Very poor diversification
The 3 months correlation between Hilton and Hyatt is 0.8. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Grand Vacations and Hyatt Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hyatt Hotels and Hilton Grand 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 Grand Vacations are associated (or correlated) with Hyatt Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hyatt Hotels has no effect on the direction of Hilton Grand i.e., Hilton Grand and Hyatt Hotels go up and down completely randomly.
Pair Corralation between Hilton Grand and Hyatt Hotels
Considering the 90-day investment horizon Hilton Grand Vacations is expected to generate 1.52 times more return on investment than Hyatt Hotels. However, Hilton Grand is 1.52 times more volatile than Hyatt Hotels. It trades about -0.11 of its potential returns per unit of risk. Hyatt Hotels is currently generating about -0.24 per unit of risk. If you would invest 4,476 in Hilton Grand Vacations on January 19, 2024 and sell it today you would lose (170.00) from holding Hilton Grand Vacations or give up 3.8% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Strong |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Grand Vacations vs. Hyatt Hotels
Performance |
| Timeline |
| Hilton Grand Vacations |
| Hyatt Hotels |
Hilton Grand and Hyatt Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Grand and Hyatt Hotels
The main advantage of trading using opposite Hilton Grand and Hyatt Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Grand position performs unexpectedly, Hyatt Hotels 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 Hyatt Hotels will offset losses from the drop in Hyatt Hotels' long position.| Hilton Grand vs. Revelation Biosciences | Hilton Grand vs. HUMANA INC | Hilton Grand vs. Aquagold International | Hilton Grand vs. Thrivent High Yield |
| Hyatt Hotels vs. Soho House Co | Hyatt Hotels vs. The Intergroup | Hyatt Hotels vs. Hilton Worldwide Holdings | Hyatt Hotels vs. Atour Lifestyle Holdings |
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 Aroon Oscillator module to analyze current equity momentum using Aroon Oscillator and other momentum ratios.
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