Correlation Between Hilton Worldwide and Visa
Can any of the company-specific risk be diversified away by investing in both Hilton Worldwide and Visa 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 Visa 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 Visa Class A, you can compare the effects of market volatilities on Hilton Worldwide and Visa 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 Visa. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Worldwide and Visa.
Diversification Opportunities for Hilton Worldwide and Visa
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Hilton and Visa is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Visa Class A in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Visa Class A 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 Visa. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Visa Class A has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Visa go up and down completely randomly.
Pair Corralation between Hilton Worldwide and Visa
Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 1.33 times more return on investment than Visa. However, Hilton Worldwide is 1.33 times more volatile than Visa Class A. It trades about 0.04 of its potential returns per unit of risk. Visa Class A is currently generating about 0.05 per unit of risk. If you would invest 14,867 in Hilton Worldwide Holdings on January 25, 2024 and sell it today you would earn a total of 4,837 from holding Hilton Worldwide Holdings or generate 32.54% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Hilton Worldwide Holdings vs. Visa Class A
Performance |
| Timeline |
| Hilton Worldwide Holdings |
| Visa Class A |
Hilton Worldwide and Visa Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Hilton Worldwide and Visa
The main advantage of trading using opposite Hilton Worldwide and Visa positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Hilton Worldwide position performs unexpectedly, Visa 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 Visa will offset losses from the drop in Visa's long position.| Hilton Worldwide vs. Yatra Online | Hilton Worldwide vs. Despegar Corp | Hilton Worldwide vs. Mondee Holdings | Hilton Worldwide vs. MakeMyTrip Limited |
| Visa vs. American Express | Visa vs. Capital One Financial | Visa vs. Upstart HoldingsInc | Visa vs. Ally Financial |
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 Portfolio Suggestion module to get suggestions outside of your existing asset allocation including your own model portfolios.
Other Complementary Tools
| Positions Ratings Determine portfolio positions ratings based on digital equity recommendations. Macroaxis instant position ratings are based on combination of fundamental analysis and risk-adjusted market performance | |
| Stock Tickers Use high-impact, comprehensive, and customizable stock tickers that can be easily integrated to any websites | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Economic Indicators Top statistical indicators that provide insights into how an economy is performing | |
| Alpha Finder Use alpha and beta coefficients to find investment opportunities after accounting for the risk | |
| Transaction History View history of all your transactions and understand their impact on performance | |
| Portfolio Optimization Compute new portfolio that will generate highest expected return given your specified tolerance for risk |