Correlation Between Hilton Worldwide and GreenTree Hospitality
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and GreenTree Hospitality 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 GreenTree Hospitality 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 GreenTree Hospitality Group, you can compare the effects of market volatilities on Hilton Worldwide and GreenTree Hospitality 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 GreenTree Hospitality. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and GreenTree Hospitality.
Diversification Opportunities for Hilton Worldwide and GreenTree Hospitality
0.14 | Correlation Coefficient |
Average diversification
The 3 months correlation between Hilton and GreenTree is 0.14. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and GreenTree Hospitality Group in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on GreenTree Hospitality 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 GreenTree Hospitality. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of GreenTree Hospitality has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and GreenTree Hospitality go up and down completely randomly.
Pair Corralation between Hilton Worldwide and GreenTree Hospitality
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.4 times more return on investment than GreenTree Hospitality. However, Hilton Worldwide Holdings is 2.48 times less risky than GreenTree Hospitality. It trades about 0.07 of its potential returns per unit of risk. GreenTree Hospitality Group is currently generating about -0.05 per unit of risk. If you would invest 18,743 in Hilton Worldwide Holdings on January 24, 2024 and sell it today you would earn a total of 771.00 from holding Hilton Worldwide Holdings or generate 4.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. GreenTree Hospitality Group
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| GreenTree Hospitality |
Hilton Worldwide and GreenTree Hospitality Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and GreenTree Hospitality
The main advantage of trading using opposite Hilton Worldwide and GreenTree Hospitality positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, GreenTree Hospitality 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 GreenTree Hospitality will offset losses from the drop in GreenTree Hospitality's long position.| Hilton Worldwide vs. Yatra Online | Hilton Worldwide vs. Despegar Corp | Hilton Worldwide vs. Mondee Holdings | Hilton Worldwide vs. MakeMyTrip Limited |
| GreenTree Hospitality vs. Yatra Online | GreenTree Hospitality vs. Despegar Corp | GreenTree Hospitality vs. Mondee Holdings | GreenTree Hospitality 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 Equity Search module to search for actively traded equities including funds and ETFs from over 30 global markets.
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