Correlation Between Hilton Worldwide and Boeing

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

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

Diversification Opportunities for Hilton Worldwide and Boeing

0.64

Correlation Coefficient

Hilton Worldwide  Boeing

Poor diversification

The 3 months correlation between Hilton and Boeing is 0.64. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and The Boeing in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Boeing and Hilton Worldwide 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 Worldwide Holdings are associated (or correlated) with Boeing. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Boeing has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Boeing go up and down completely randomly.

Pair Corralation between Hilton Worldwide and Boeing

Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to under-perform the Boeing. But the stock apears to be less risky and, when comparing its historical volatility, Hilton Worldwide Holdings is 1.39 times less risky than Boeing. The stock trades about -0.08 of its potential returns per unit of risk. The The Boeing is currently generating about 0.02 of returns per unit of risk over similar time horizon. If you would invest  17,934  in The Boeing on December 24, 2024 and sell it today you would earn a total of  156.00  from holding The Boeing or generate 0.87% return on investment over 90 days.

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

Hilton Worldwide Holdings  vs.  The Boeing

Hilton Worldwide Holdings

Risk-Adjusted Performance

Very Weak

Over the last 90 days Hilton Worldwide Holdings has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest inconsistent performance, the Stock's essential indicators remain stable and the newest uproar on Wall Street may also be a sign of mid-term gains for the firm private investors.

Boeing

Risk-Adjusted Performance

Very Weak

Compared to the overall equity markets, risk-adjusted returns on investments in The Boeing are ranked lower than 1 (%) of all global equities and portfolios over the last 90 days. Despite somewhat strong basic indicators, Boeing is not utilizing all of its potentials. The current stock price disturbance, may contribute to short-term losses for the investors.

Pair Trading with Hilton Worldwide and Boeing

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

The idea behind Hilton Worldwide Holdings and The Boeing 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 Stock Screener module to find equities using a custom stock filter or screen asymmetry in trading patterns, price, volume, or investment outlook..