Correlation Between Full House and Hilton Grand

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

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

Diversification Opportunities for Full House and Hilton Grand

-0.38

Correlation Coefficient

Full House  Hilton Grand

Very good diversification

The 3 months correlation between Full and Hilton is -0.38. Overlapping area represents the amount of risk that can be diversified away by holding Full House Resorts 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 Full House 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 Full House Resorts 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 Full House i.e., Full House and Hilton Grand go up and down completely randomly.

Pair Corralation between Full House and Hilton Grand

Considering the 90-day investment horizon Full House Resorts is expected to under-perform the Hilton Grand. But the stock apears to be less risky and, when comparing its historical volatility, Full House Resorts is 1.1 times less risky than Hilton Grand. The stock trades about -0.03 of its potential returns per unit of risk. The Hilton Grand Vacations is currently generating about 0.08 of returns per unit of risk over similar time horizon. If you would invest  3,790  in Hilton Grand Vacations on August 31, 2024 and sell it today you would earn a total of  384.00  from holding Hilton Grand Vacations or generate 10.13% return on investment over 90 days.

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

Full House Resorts  vs.  Hilton Grand Vacations

Full House Resorts

Risk-Adjusted Performance

0 of 100

Very Weak

Over the last 90 days Full House Resorts has generated negative risk-adjusted returns adding no value to investors with long positions. Despite quite persistent essential indicators, Full House is not utilizing all of its potentials. The recent stock price mess, may contribute to short-term losses for the institutional investors.

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 Full House and Hilton Grand

The main advantage of trading using opposite Full House and Hilton Grand positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Full House 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 Full House Resorts 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 Headlines Timeline module to stay connected to all market stories and filter out noise. Drill down to analyze hype elasticity.