Correlation Between Qurate Retail and Melia Hotels
Can any of the company-specific risk be diversified away by investing in both Qurate Retail and Melia Hotels 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 Qurate Retail and Melia Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Qurate Retail Series and Melia Hotels, you can compare the effects of market volatilities on Qurate Retail and Melia Hotels 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 Qurate Retail with a short position of Melia Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of Qurate Retail and Melia Hotels.
Diversification Opportunities for Qurate Retail and Melia Hotels
-0.86 | Correlation Coefficient |
Pay attention - limited upside
The 3 months correlation between Qurate and Melia is -0.86. Overlapping area represents the amount of risk that can be diversified away by holding Qurate Retail Series and Melia Hotels in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Melia Hotels and Qurate Retail 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 Qurate Retail Series are associated (or correlated) with Melia Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Melia Hotels has no effect on the direction of Qurate Retail i.e., Qurate Retail and Melia Hotels go up and down completely randomly.
Pair Corralation between Qurate Retail and Melia Hotels
Assuming the 90 days trading horizon Qurate Retail Series is expected to generate 2.62 times more return on investment than Melia Hotels. However, Qurate Retail is 2.62 times more volatile than Melia Hotels. It trades about 0.17 of its potential returns per unit of risk. Melia Hotels is currently generating about 0.12 per unit of risk. If you would invest 36.00 in Qurate Retail Series on October 9, 2024 and sell it today you would earn a total of 4.00 from holding Qurate Retail Series or generate 11.11% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Significant |
| Accuracy | 94.74% |
| Values | Daily Returns |
Qurate Retail Series vs. Melia Hotels
Performance |
| Timeline |
| Qurate Retail Series |
| Melia Hotels |
Qurate Retail and Melia Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Qurate Retail and Melia Hotels
The main advantage of trading using opposite Qurate Retail and Melia Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Qurate Retail position performs unexpectedly, Melia Hotels 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 Melia Hotels will offset losses from the drop in Melia Hotels' long position.| Qurate Retail vs. Catalyst Media Group | Qurate Retail vs. G5 Entertainment AB | Qurate Retail vs. Centaur Media | Qurate Retail vs. Mobile Tornado Group |
| Melia Hotels vs. Jupiter Fund Management | Melia Hotels vs. Tatton Asset Management | Melia Hotels vs. Batm Advanced Communications | Melia Hotels vs. Coor Service Management |
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 Global Markets Map module to get a quick overview of global market snapshot using zoomable world map. Drill down to check world indexes.
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