Correlation Between Hilton Worldwide and Orix Corp

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

Diversification Opportunities for Hilton Worldwide and Orix Corp

-0.15

Correlation Coefficient

Hilton Worldwide  Orix Corp

Good diversification

The 3 months correlation between Hilton and Orix is -0.15. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and Orix Corp Ads in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Orix Corp Ads 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 Orix Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Orix Corp Ads has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and Orix Corp go up and down completely randomly.

Pair Corralation between Hilton Worldwide and Orix Corp

Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.93 times more return on investment than Orix Corp. However, Hilton Worldwide Holdings is 1.08 times less risky than Orix Corp. It trades about 0.08 of its potential returns per unit of risk. Orix Corp Ads is currently generating about -0.12 per unit of risk. If you would invest  25,033  in Hilton Worldwide Holdings on December 2, 2024 and sell it today you would earn a total of  1,463  from holding Hilton Worldwide Holdings or generate 5.84% return on investment over 90 days.

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

Hilton Worldwide Holdings  vs.  Orix Corp Ads

Hilton Worldwide Holdings

Risk-Adjusted Performance

Modest

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

Orix Corp Ads

Risk-Adjusted Performance

Very Weak

Over the last 90 days Orix Corp Ads has generated negative risk-adjusted returns adding no value to investors with long positions. In spite of latest weak performance, the Stock's basic indicators remain strong and the current disturbance on Wall Street may also be a sign of long term gains for the company investors.

Pair Trading with Hilton Worldwide and Orix Corp

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

The idea behind Hilton Worldwide Holdings and Orix Corp Ads 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.

Check out your portfolio center.

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 Balance Of Power module to check stock momentum by analyzing Balance Of Power indicator and other technical ratios.