Correlation Between Hilton Worldwide and McDonalds
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and McDonalds 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 McDonalds 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 McDonalds, you can compare the effects of market volatilities on Hilton Worldwide and McDonalds 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 McDonalds. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and McDonalds.
Diversification Opportunities for Hilton Worldwide and McDonalds
-0.53 | Correlation Coefficient |
Excellent diversification
The 3 months correlation between Hilton and McDonalds is -0.53. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and McDonalds in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on McDonalds 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 McDonalds. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of McDonalds has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and McDonalds go up and down completely randomly.
Pair Corralation between Hilton Worldwide and McDonalds
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 1.44 times more return on investment than McDonalds. However, Hilton Worldwide is 1.44 times more volatile than McDonalds. It trades about 0.08 of its potential returns per unit of risk. McDonalds is currently generating about 0.02 per unit of risk. If you would invest 14,195 in Hilton Worldwide Holdings on January 24, 2024 and sell it today you would earn a total of 5,319 from holding Hilton Worldwide Holdings or generate 37.47% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. McDonalds
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| McDonalds |
Hilton Worldwide and McDonalds Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and McDonalds
The main advantage of trading using opposite Hilton Worldwide and McDonalds positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, McDonalds 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 McDonalds will offset losses from the drop in McDonalds' long position.| Hilton Worldwide vs. Yatra Online | Hilton Worldwide vs. Despegar Corp | Hilton Worldwide vs. Mondee Holdings | Hilton Worldwide vs. MakeMyTrip Limited |
| McDonalds vs. Chipotle Mexican Grill | McDonalds vs. Dutch Bros | McDonalds vs. Dominos Pizza | McDonalds vs. Yum Brands |
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 Volatility Analysis module to get historical volatility and risk analysis based on latest market data.
Other Complementary Tools
| Stock Screener Find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook. | |
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Fundamental Analysis View fundamental data based on most recent published financial statements | |
| Competition Analyzer Analyze and compare many basic indicators for a group of related or unrelated entities |