Correlation Between OneSpaWorld Holdings and Hilton Grand

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

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

Diversification Opportunities for OneSpaWorld Holdings and Hilton Grand

0.83

Correlation Coefficient

OneSpaWorld Holdings  Hilton Grand

Very poor diversification

The 3 months correlation between OneSpaWorld and Hilton is 0.83. Overlapping area represents the amount of risk that can be diversified away by holding OneSpaWorld Holdings and Hilton Grand Vacations in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Grand Vacations and OneSpaWorld Holdings 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 OneSpaWorld Holdings are associated (or correlated) with Hilton Grand. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Grand Vacations has no effect on the direction of OneSpaWorld Holdings i.e., OneSpaWorld Holdings and Hilton Grand go up and down completely randomly.

Pair Corralation between OneSpaWorld Holdings and Hilton Grand

Considering the 90-day investment horizon OneSpaWorld Holdings is expected to generate 0.72 times more return on investment than Hilton Grand. However, OneSpaWorld Holdings is 1.39 times less risky than Hilton Grand. It trades about 0.22 of its potential returns per unit of risk. Hilton Grand Vacations is currently generating about 0.08 per unit of risk. If you would invest  1,532  in OneSpaWorld Holdings on August 31, 2024 and sell it today you would earn a total of  368.00  from holding OneSpaWorld Holdings or generate 24.02% return on investment over 90 days.

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

OneSpaWorld Holdings  vs.  Hilton Grand Vacations

OneSpaWorld Holdings

Risk-Adjusted Performance

17 of 100

Solid

Compared to the overall equity markets, risk-adjusted returns on investments in OneSpaWorld Holdings are ranked lower than 17 (%) of all global equities and portfolios over the last 90 days. In spite of fairly uncertain basic indicators, OneSpaWorld Holdings showed solid returns over the last few months and may actually be approaching a breakup point.

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 December 2024.

Pair Trading with OneSpaWorld Holdings and Hilton Grand

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

The idea behind OneSpaWorld Holdings and Hilton Grand Vacations 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 Earnings Calls module to check upcoming earnings announcements updated hourly across public exchanges.