Correlation Between Vail Resorts and Hilton Grand
Can any of the company-specific risk be diversified away by investing in both Vail Resorts and Hilton Grand 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 Vail Resorts and Hilton Grand into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Vail Resorts and Hilton Grand Vacations, you can compare the effects of market volatilities on Vail Resorts and Hilton Grand 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 Vail Resorts with a short position of Hilton Grand. Check out your portfolio center. Please also check ongoing floating volatility patterns of Vail Resorts and Hilton Grand.
Diversification Opportunities for Vail Resorts and Hilton Grand
0.61 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Vail and Hilton is 0.61. Overlapping area represents the amount of risk that can be diversified away by holding Vail Resorts and Hilton Grand Vacations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Grand Vacations and Vail Resorts 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 Vail Resorts are associated (or correlated) with Hilton Grand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Grand Vacations has no effect on the direction of Vail Resorts i.e., Vail Resorts and Hilton Grand go up and down completely randomly.
Pair Corralation between Vail Resorts and Hilton Grand
Considering the 90-day investment horizon Vail Resorts is expected to under-perform the Hilton Grand. But the stock apears to be less risky and, when comparing its historical volatility, Vail Resorts is 1.33 times less risky than Hilton Grand. The stock trades about -0.09 of its potential returns per unit of risk. The Hilton Grand Vacations is currently generating about -0.01 of returns per unit of risk over similar time horizon. If you would invest 4,824 in Hilton Grand Vacations on December 29, 2023 and sell it today you would lose (49.00) from holding Hilton Grand Vacations or give up 1.02% of portfolio value over 90 days.
Time Period | 3 Months [change] |
Direction | Moves Together |
Strength | Significant |
Accuracy | 100.0% |
Values | Daily Returns |
Vail Resorts vs. Hilton Grand Vacations
Performance |
Timeline |
Vail Resorts |
Hilton Grand Vacations |
Vail Resorts and Hilton Grand Volatility Contrast
Predicted Return Density |
Returns |
Pair Trading with Vail Resorts and Hilton Grand
The main advantage of trading using opposite Vail Resorts and Hilton Grand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Vail Resorts position performs unexpectedly, Hilton Grand 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 Hilton Grand will offset losses from the drop in Hilton Grand's long position.Vail Resorts vs. Hyatt Hotels | Vail Resorts vs. Smart Share Global | Vail Resorts vs. Wyndham Hotels Resorts | Vail Resorts vs. WW International |
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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 Correlation Analysis module to reduce portfolio risk simply by holding instruments which are not perfectly correlated.
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