Correlation Between Melia Hotels and Gaztransport
Can any of the company-specific risk be diversified away by investing in both Melia Hotels and Gaztransport 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 Gaztransport into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melia Hotels and Gaztransport et Technigaz, you can compare the effects of market volatilities on Melia Hotels and Gaztransport 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 Gaztransport. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melia Hotels and Gaztransport.
Diversification Opportunities for Melia Hotels and Gaztransport
0.72 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Melia and Gaztransport is 0.72. Overlapping area represents the amount of risk that can be diversified away by holding Melia Hotels and Gaztransport et Technigaz in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Gaztransport et Technigaz 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 Gaztransport. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Gaztransport et Technigaz has no effect on the direction of Melia Hotels i.e., Melia Hotels and Gaztransport go up and down completely randomly.
Pair Corralation between Melia Hotels and Gaztransport
Assuming the 90 days trading horizon Melia Hotels is expected to generate 1.03 times more return on investment than Gaztransport. However, Melia Hotels is 1.03 times more volatile than Gaztransport et Technigaz. It trades about 0.07 of its potential returns per unit of risk. Gaztransport et Technigaz is currently generating about 0.04 per unit of risk. If you would invest 566.00 in Melia Hotels on September 14, 2024 and sell it today you would earn a total of 191.00 from holding Melia Hotels or generate 33.75% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 99.63% |
| Values | Daily Returns |
Melia Hotels vs. Gaztransport et Technigaz
Performance |
| Timeline |
| Melia Hotels |
| Gaztransport et Technigaz |
Melia Hotels and Gaztransport Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melia Hotels and Gaztransport
The main advantage of trading using opposite Melia Hotels and Gaztransport positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melia Hotels position performs unexpectedly, Gaztransport 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 Gaztransport will offset losses from the drop in Gaztransport's long position.| Melia Hotels vs. Silvercorp Metals | Melia Hotels vs. Gaztransport et Technigaz | Melia Hotels vs. Evolution Gaming Group | Melia Hotels vs. Wheaton Precious Metals |
| Gaztransport vs. Park Hotels Resorts | Gaztransport vs. Ross Stores | Gaztransport vs. Melia Hotels | Gaztransport vs. Silvercorp Metals |
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 Portfolio Comparator module to compare the composition, asset allocations and performance of any two portfolios in your account.
Other Complementary Tools
| Sign In To Macroaxis Sign in to explore Macroaxis' wealth optimization platform and fintech modules | |
| CEOs Directory Screen CEOs from public companies around the world | |
| Fundamentals Comparison Compare fundamentals across multiple equities to find investing opportunities | |
| Financial Widgets Easily integrated Macroaxis content with over 30 different plug-and-play financial widgets | |
| Equity Valuation Check real value of public entities based on technical and fundamental data |