Correlation Between COFCO Joycome and Meli Hotels
Can any of the company-specific risk be diversified away by investing in both COFCO Joycome and Meli 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 COFCO Joycome and Meli Hotels into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between COFCO Joycome Foods and Meli Hotels International, you can compare the effects of market volatilities on COFCO Joycome and Meli 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 COFCO Joycome with a short position of Meli Hotels. Check out your portfolio center. Please also check ongoing floating volatility patterns of COFCO Joycome and Meli Hotels.
Diversification Opportunities for COFCO Joycome and Meli Hotels
0.3 | Correlation Coefficient |
Weak diversification
The 3 months correlation between COFCO and Meli is 0.3. Overlapping area represents the amount of risk that can be diversified away by holding COFCO Joycome Foods and Meli Hotels International in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Meli Hotels International and COFCO Joycome 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 COFCO Joycome Foods are associated (or correlated) with Meli Hotels. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Meli Hotels International has no effect on the direction of COFCO Joycome i.e., COFCO Joycome and Meli Hotels go up and down completely randomly.
Pair Corralation between COFCO Joycome and Meli Hotels
Assuming the 90 days horizon COFCO Joycome Foods is expected to under-perform the Meli Hotels. In addition to that, COFCO Joycome is 2.61 times more volatile than Meli Hotels International. It trades about -0.05 of its total potential returns per unit of risk. Meli Hotels International is currently generating about 0.01 per unit of volatility. If you would invest 670.00 in Meli Hotels International on September 1, 2024 and sell it today you would earn a total of 0.00 from holding Meli Hotels International or generate 0.0% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Very Weak |
| Accuracy | 100.0% |
| Values | Daily Returns |
COFCO Joycome Foods vs. Meli Hotels International
Performance |
| Timeline |
| COFCO Joycome Foods |
| Meli Hotels International |
COFCO Joycome and Meli Hotels Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with COFCO Joycome and Meli Hotels
The main advantage of trading using opposite COFCO Joycome and Meli Hotels positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if COFCO Joycome position performs unexpectedly, Meli 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 Meli Hotels will offset losses from the drop in Meli Hotels' long position.| COFCO Joycome vs. Danone SA | COFCO Joycome vs. Superior Plus Corp | COFCO Joycome vs. NMI Holdings | COFCO Joycome vs. Origin Agritech |
| Meli Hotels vs. Avanos Medical | Meli Hotels vs. TYSON FOODS A | Meli Hotels vs. INDOFOOD AGRI RES | Meli Hotels vs. SAFETY MEDICAL PROD |
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 Money Flow Index module to determine momentum by analyzing Money Flow Index and other technical indicators.
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