Correlation Between GRIFFIN MINING and Hilton Worldwide

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

By analyzing existing cross correlation between GRIFFIN MINING LTD and Hilton Worldwide Holdings, you can compare the effects of market volatilities on GRIFFIN MINING and Hilton Worldwide 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 GRIFFIN MINING with a short position of Hilton Worldwide. Check out your portfolio center. Please also check ongoing floating volatility patterns of GRIFFIN MINING and Hilton Worldwide.

Diversification Opportunities for GRIFFIN MINING and Hilton Worldwide

-0.58

Correlation Coefficient

GRIFFIN MINING  Hilton Worldwide

Excellent diversification

The 3 months correlation between GRIFFIN and Hilton is -0.58. Overlapping area represents the amount of risk that can be diversified away by holding GRIFFIN MINING LTD and Hilton Worldwide Holdings in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Worldwide Holdings and GRIFFIN MINING 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 GRIFFIN MINING LTD are associated (or correlated) with Hilton Worldwide. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Worldwide Holdings has no effect on the direction of GRIFFIN MINING i.e., GRIFFIN MINING and Hilton Worldwide go up and down completely randomly.

Pair Corralation between GRIFFIN MINING and Hilton Worldwide

Assuming the 90 days horizon GRIFFIN MINING LTD is expected to under-perform the Hilton Worldwide. In addition to that, GRIFFIN MINING is 1.24 times more volatile than Hilton Worldwide Holdings. It trades about -0.06 of its total potential returns per unit of risk. Hilton Worldwide Holdings is currently generating about 0.18 per unit of volatility. If you would invest  20,787  in Hilton Worldwide Holdings on October 4, 2024 and sell it today you would earn a total of  2,993  from holding Hilton Worldwide Holdings or generate 14.4% return on investment over 90 days.

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

GRIFFIN MINING LTD  vs.  Hilton Worldwide Holdings

GRIFFIN MINING LTD

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days GRIFFIN MINING LTD has generated negative risk-adjusted returns adding no value to investors with long positions. Despite latest uncertain performance, the Stock's basic indicators remain stable and the current disturbance on Wall Street may also be a sign of long-run gains for the company stockholders.

Hilton Worldwide Holdings

Risk-Adjusted Performance

13 of 100

Good

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Worldwide Holdings are ranked lower than 13 (%) of all global equities and portfolios over the last 90 days. Despite nearly fragile basic indicators, Hilton Worldwide reported solid returns over the last few months and may actually be approaching a breakup point.

Pair Trading with GRIFFIN MINING and Hilton Worldwide

The main advantage of trading using opposite GRIFFIN MINING and Hilton Worldwide positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if GRIFFIN MINING position performs unexpectedly, Hilton Worldwide 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 Worldwide will offset losses from the drop in Hilton Worldwide's long position.

The idea behind GRIFFIN MINING LTD and Hilton Worldwide Holdings 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 AI Portfolio Architect module to use AI to generate optimal portfolios and find profitable investment opportunities.