Correlation Between Hilton Worldwide and Texas Gulf
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Texas Gulf 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 Texas Gulf 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 Texas Gulf Energy, you can compare the effects of market volatilities on Hilton Worldwide and Texas Gulf 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 Texas Gulf. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Texas Gulf.
Diversification Opportunities for Hilton Worldwide and Texas Gulf
0.65 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hilton and Texas is 0.65. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Texas Gulf Energy in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Texas Gulf Energy 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 Texas Gulf. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Texas Gulf Energy has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Texas Gulf go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Texas Gulf
Considering the 90-day investment horizon Hilton Worldwide is expected to generate 27.03 times less return on investment than Texas Gulf. But when comparing it to its historical volatility, Hilton Worldwide Holdings is 26.44 times less risky than Texas Gulf. It trades about 0.04 of its potential returns per unit of risk. Texas Gulf Energy is currently generating about 0.04 of returns per unit of risk over similar time horizon. If you would invest 186,142 in Texas Gulf Energy on January 17, 2024 and sell it today you would earn a total of 31,092 from holding Texas Gulf Energy or generate 16.7% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.8% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. Texas Gulf Energy
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Texas Gulf Energy |
Hilton Worldwide and Texas Gulf Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Texas Gulf
The main advantage of trading using opposite Hilton Worldwide and Texas Gulf positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Texas Gulf 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 Texas Gulf will offset losses from the drop in Texas Gulf's long position.| Hilton Worldwide vs. Yatra Online | Hilton Worldwide vs. Despegar Corp | Hilton Worldwide vs. Mondee Holdings | Hilton Worldwide vs. MakeMyTrip Limited |
| Texas Gulf vs. Fiserv Inc | Texas Gulf vs. Schlumberger NV | Texas Gulf vs. Halliburton | Texas Gulf vs. Baker Hughes Co |
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 Funds Screener module to find actively-traded funds from around the world traded on over 30 global exchanges.
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