Correlation Between Hilton Grand and Las Vegas

Can any of the company-specific risk be diversified away by investing in both Hilton Grand and Las Vegas 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 Las Vegas 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 Las Vegas Sands, you can compare the effects of market volatilities on Hilton Grand and Las Vegas 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 Las Vegas. Check out your portfolio center. Please also check ongoing floating volatility patterns of Hilton Grand and Las Vegas.

Diversification Opportunities for Hilton Grand and Las Vegas

-0.05

Correlation Coefficient

Hilton Grand  Las Vegas

Good diversification

The 3 months correlation between Hilton and Las is -0.05. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Grand Vacations and Las Vegas Sands in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Las Vegas Sands 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 Las Vegas. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Las Vegas Sands has no effect on the direction of Hilton Grand i.e., Hilton Grand and Las Vegas go up and down completely randomly.

Pair Corralation between Hilton Grand and Las Vegas

Considering the 90-day investment horizon Hilton Grand Vacations is expected to under-perform the Las Vegas. In addition to that, Hilton Grand is 1.15 times more volatile than Las Vegas Sands. It trades about 0.0 of its total potential returns per unit of risk. Las Vegas Sands is currently generating about 0.01 per unit of volatility. If you would invest  5,218  in Las Vegas Sands on October 3, 2024 and sell it today you would lose (82.00) from holding Las Vegas Sands or give up 1.57% of portfolio value over 90 days.

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

Hilton Grand Vacations  vs.  Las Vegas Sands

Hilton Grand Vacations

Risk-Adjusted Performance

6 of 100

Modest

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Grand Vacations are ranked lower than 6 (%) of all global equities and portfolios over the last 90 days. In spite of fairly unfluctuating technical and fundamental indicators, Hilton Grand may actually be approaching a critical reversion point that can send shares even higher in February 2025.

Las Vegas Sands

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Las Vegas Sands has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of comparatively stable basic indicators, Las Vegas is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

Pair Trading with Hilton Grand and Las Vegas

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

The idea behind Hilton Grand Vacations and Las Vegas Sands 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 Positions Ratings module to 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.