Correlation Between Hilton Worldwide and NVIDIA

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

Diversification Opportunities for Hilton Worldwide and NVIDIA

-0.28

Correlation Coefficient

Hilton Worldwide  NVIDIA

Very good diversification

The 3 months correlation between Hilton and NVIDIA is -0.28. Overlapping area represents the amount of risk that can be diversified away by holding Hilton Worldwide Holdings and NVIDIA in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on NVIDIA 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 NVIDIA. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of NVIDIA has no effect on the direction of Hilton Worldwide i.e., Hilton Worldwide and NVIDIA go up and down completely randomly.

Pair Corralation between Hilton Worldwide and NVIDIA

Considering the 90-day investment horizon Hilton Worldwide Holdings is expected to generate 0.42 times more return on investment than NVIDIA. However, Hilton Worldwide Holdings is 2.38 times less risky than NVIDIA. It trades about 0.1 of its potential returns per unit of risk. NVIDIA is currently generating about -0.01 per unit of risk. If you would invest  25,613  in Hilton Worldwide Holdings on December 4, 2024 and sell it today you would earn a total of  745.00  from holding Hilton Worldwide Holdings or generate 2.91% 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.  NVIDIA

Hilton Worldwide Holdings

Risk-Adjusted Performance

Insignificant

Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Worldwide Holdings are ranked lower than 4 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively stable essential indicators, Hilton Worldwide is not utilizing all of its potentials. The recent stock price uproar, may contribute to short-horizon losses for the private investors.

NVIDIA

Risk-Adjusted Performance

Very Weak

Over the last 90 days NVIDIA has generated negative risk-adjusted returns adding no value to investors with long positions. Despite unsteady performance in the last few months, the Stock's fundamental indicators remain somewhat 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 Worldwide and NVIDIA

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

The idea behind Hilton Worldwide Holdings and NVIDIA 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 Technical Analysis module to check basic technical indicators and analysis based on most latest market data.