Correlation Between E Home and Hilton Grand

Can any of the company-specific risk be diversified away by investing in both E Home 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 E Home and Hilton Grand into the same portfolio, which is an essential part of the fundamental portfolio management process.

By analyzing existing cross correlation between E Home Household Service and Hilton Grand Vacations, you can compare the effects of market volatilities on E Home 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 E Home with a short position of Hilton Grand. Check out your portfolio center. Please also check ongoing floating volatility patterns of E Home and Hilton Grand.

Diversification Opportunities for E Home and Hilton Grand

-0.58

Correlation Coefficient

E Home  Hilton Grand

Excellent diversification

The 3 months correlation between EJH and Hilton is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding E Home Household Service 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 E Home 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 E Home Household Service 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 E Home i.e., E Home and Hilton Grand go up and down completely randomly.

Pair Corralation between E Home and Hilton Grand

Considering the 90-day investment horizon E Home Household Service is expected to generate 4.43 times more return on investment than Hilton Grand. However, E Home is 4.43 times more volatile than Hilton Grand Vacations. It trades about 0.14 of its potential returns per unit of risk. Hilton Grand Vacations is currently generating about -0.01 per unit of risk. If you would invest  67.00  in E Home Household Service on December 27, 2024 and sell it today you would earn a total of  49.00  from holding E Home Household Service or generate 73.13% return on investment over 90 days.

Time Period	3 Months [change]
Direction	Moves Against
Strength	Very Weak
Accuracy	100.0%
Values	Daily Returns

E Home Household Service  vs.  Hilton Grand Vacations

E Home Household

Risk-Adjusted Performance

OK

Compared to the overall equity markets, risk-adjusted returns on investments in E Home Household Service are ranked lower than 10 (%) of all global equities and portfolios over the last 90 days. Despite fairly fragile forward-looking indicators, E Home demonstrated solid returns over the last few months and may actually be approaching a breakup point.

Hilton Grand Vacations

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hilton Grand Vacations has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of fairly stable technical and fundamental indicators, Hilton Grand is not utilizing all of its potentials. The recent stock price fuss, may contribute to near-short-term losses for the sophisticated investors.

Pair Trading with E Home and Hilton Grand

The main advantage of trading using opposite E Home and Hilton Grand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if E Home 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.

The idea behind E Home Household Service and Hilton Grand Vacations pairs trading is to make the combined position market-neutral, meaning the overall market's direction will not affect its win or loss (or potential downside or upside). This can be achieved by designing a pairs trade with two highly correlated stocks or equities that operate in a similar space or sector, making it possible to obtain profits through simple and relatively low-risk investment.

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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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.