Correlation Between Marriot Int and Hilton

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Can any of the company-specific risk be diversified away by investing in both Marriot Int and Hilton 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 Marriot Int and Hilton into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Marriot Int Cl and Hilton Inc, you can compare the effects of market volatilities on Marriot Int and Hilton 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 Marriot Int with a short position of Hilton. Check out your portfolio center. Please also check ongoing floating volatility patterns of Marriot Int and Hilton.

Diversification Opportunities for Marriot Int and Hilton

0.95
  Correlation Coefficient

Almost no diversification

The 3 months correlation between Marriot and Hilton is 0.95. Overlapping area represents the amount of risk that can be diversified away by holding Marriot Int Cl and Hilton Inc in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Hilton Inc and Marriot Int 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 Marriot Int Cl are associated (or correlated) with Hilton. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Hilton Inc has no effect on the direction of Marriot Int i.e., Marriot Int and Hilton go up and down completely randomly.

Pair Corralation between Marriot Int and Hilton

Considering the 90-day investment horizon Marriot Int Cl is expected to generate 1.01 times more return on investment than Hilton. However, Marriot Int is 1.01 times more volatile than Hilton Inc. It trades about 0.04 of its potential returns per unit of risk. Hilton Inc is currently generating about 0.03 per unit of risk. If you would invest  13,323  in Marriot Int Cl on August 31, 2022 and sell it today you would earn a total of  2,566  from holding Marriot Int Cl or generate 19.26% return on investment over 90 days.
Time Period3 Months [change]
DirectionMoves Together 
StrengthVery Strong
Accuracy100.0%
ValuesDaily Returns

Marriot Int Cl  vs.  Hilton Inc

 Performance (%) 
       Timeline  
Marriot Int Cl 
Marriot Performance
2 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Marriot Int Cl are ranked lower than 2 (%) of all global equities and portfolios over the last 90 days. Even with relatively invariable basic indicators, Marriot Int is not utilizing all of its potentials. The new stock price agitation, may contribute to short-term losses for the retail investors.

Marriot Price Channel

Hilton Inc 
Hilton Performance
5 of 100
Compared to the overall equity markets, risk-adjusted returns on investments in Hilton Inc are ranked lower than 5 (%) of all global equities and portfolios over the last 90 days. In spite of comparatively sluggish essential indicators, Hilton may actually be approaching a critical reversion point that can send shares even higher in December 2022.

Hilton Price Channel

Marriot Int and Hilton Volatility Contrast

   Predicted Return Density   
       Returns  

Pair Trading with Marriot Int and Hilton

The main advantage of trading using opposite Marriot Int and Hilton positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Marriot Int position performs unexpectedly, Hilton 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 will offset losses from the drop in Hilton's long position.
Marriot Int vs. Carnival Corp
Marriot Int vs. Gigamedia
Marriot Int vs. Host Marriott Financial
Marriot Int vs. MGM Resorts International
The idea behind Marriot Int Cl and Hilton Inc 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.
Hilton vs. Carnival Corp
Hilton vs. Gigamedia
Hilton vs. Host Marriott Financial
Hilton vs. MGM Resorts International
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 Price Transformation module to use Price Transformation models to analyze depth of different equity instruments across global markets.

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