Correlation Between Hilton Grand and Century Casinos

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

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

Diversification Opportunities for Hilton Grand and Century Casinos

0.56

Correlation Coefficient

Hilton Grand  Century Casinos

Very weak diversification

The 3 months correlation between Hilton and Century is 0.56. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Grand Vacations and Century Casinos in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Century Casinos and Hilton Grand 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 Grand Vacations are associated (or correlated) with Century Casinos. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Century Casinos has no effect on the direction of Hilton Grand i.e., Hilton Grand and Century Casinos go up and down completely randomly.

Pair Corralation between Hilton Grand and Century Casinos

Considering the 90-day investment horizon Hilton Grand Vacations is expected to generate 0.58 times more return on investment than Century Casinos. However, Hilton Grand Vacations is 1.74 times less risky than Century Casinos. It trades about -0.02 of its potential returns per unit of risk. Century Casinos is currently generating about -0.17 per unit of risk. If you would invest  3,907  in Hilton Grand Vacations on December 29, 2024 and sell it today you would lose (170.00) from holding Hilton Grand Vacations or give up 4.35% of portfolio value over 90 days.

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

Hilton Grand Vacations  vs.  Century Casinos

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.

Century Casinos

Risk-Adjusted Performance

Very Weak

Over the last 90 days Century Casinos has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of unfluctuating performance in the last few months, the Stock's basic indicators remain fairly strong which may send shares a bit higher in April 2025. The current disturbance may also be a sign of long term up-swing for the company investors.

Pair Trading with Hilton Grand and Century Casinos

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

The idea behind Hilton Grand Vacations and Century Casinos 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.