Correlation Between Melia Hotels and Teradata Corp
Can any of the company-specific risk be diversified away by investing in both Melia Hotels and Teradata Corp 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 Melia Hotels and Teradata Corp into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melia Hotels and Teradata Corp, you can compare the effects of market volatilities on Melia Hotels and Teradata Corp 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 Melia Hotels with a short position of Teradata Corp. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melia Hotels and Teradata Corp.
Diversification Opportunities for Melia Hotels and Teradata Corp
0.13 | Correlation Coefficient |
Average diversification
The 3 months correlation between Melia and Teradata is 0.13. Overlapping area represents the amount of risk that can be diversified away by holding Melia Hotels and Teradata Corp in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Teradata Corp and Melia Hotels 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 Melia Hotels are associated (or correlated) with Teradata Corp. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Teradata Corp has no effect on the direction of Melia Hotels i.e., Melia Hotels and Teradata Corp go up and down completely randomly.
Pair Corralation between Melia Hotels and Teradata Corp
Assuming the 90 days trading horizon Melia Hotels is expected to generate 0.33 times more return on investment than Teradata Corp. However, Melia Hotels is 3.03 times less risky than Teradata Corp. It trades about 0.14 of its potential returns per unit of risk. Teradata Corp is currently generating about -0.3 per unit of risk. If you would invest 708.00 in Melia Hotels on December 4, 2024 and sell it today you would earn a total of 30.00 from holding Melia Hotels or generate 4.24% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Insignificant |
| Accuracy | 90.48% |
| Values | Daily Returns |
Melia Hotels vs. Teradata Corp
Performance |
| Timeline |
| Melia Hotels |
| Teradata Corp |
Melia Hotels and Teradata Corp Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melia Hotels and Teradata Corp
The main advantage of trading using opposite Melia Hotels and Teradata Corp positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melia Hotels position performs unexpectedly, Teradata Corp 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 Teradata Corp will offset losses from the drop in Teradata Corp's long position.| Melia Hotels vs. Tyson Foods Cl | Melia Hotels vs. Austevoll Seafood ASA | Melia Hotels vs. Jupiter Fund Management | Melia Hotels vs. Tatton Asset Management |
| Teradata Corp vs. Fulcrum Metals PLC | Teradata Corp vs. First Class Metals | Teradata Corp vs. Zinc Media Group | Teradata Corp vs. Ubisoft Entertainment |
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 Managers module to screen money managers from public funds and ETFs managed around the world.
Other Complementary Tools
| Pair Correlation Compare performance and examine fundamental relationship between any two equity instruments | |
| Equity Forecasting Use basic forecasting models to generate price predictions and determine price momentum | |
| Global Correlations Find global opportunities by holding instruments from different markets | |
| Sectors List of equity sectors categorizing publicly traded companies based on their primary business activities | |
| AI Portfolio Architect Use AI to generate optimal portfolios and find profitable investment opportunities |