Correlation Between Melia Hotels and Cboe UK
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By analyzing existing cross correlation between Melia Hotels and Cboe UK Consumer, you can compare the effects of market volatilities on Melia Hotels and Cboe UK 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 Cboe UK. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melia Hotels and Cboe UK.
Diversification Opportunities for Melia Hotels and Cboe UK
0.77 | Correlation Coefficient |
Poor diversification
The 3 months correlation between Melia and Cboe is 0.77. Overlapping area represents the amount of risk that can be diversified away by holding Melia Hotels and Cboe UK Consumer in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Cboe UK Consumer 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 Cboe UK. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Cboe UK Consumer has no effect on the direction of Melia Hotels i.e., Melia Hotels and Cboe UK go up and down completely randomly.
Pair Corralation between Melia Hotels and Cboe UK
Assuming the 90 days trading horizon Melia Hotels is expected to generate 1.06 times less return on investment than Cboe UK. In addition to that, Melia Hotels is 1.71 times more volatile than Cboe UK Consumer. It trades about 0.04 of its total potential returns per unit of risk. Cboe UK Consumer is currently generating about 0.08 per unit of volatility. If you would invest 2,232,715 in Cboe UK Consumer on September 3, 2024 and sell it today you would earn a total of 1,027,587 from holding Cboe UK Consumer or generate 46.02% return on investment over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Together |
| Strength | Significant |
| Accuracy | 98.22% |
| Values | Daily Returns |
Melia Hotels vs. Cboe UK Consumer
Performance |
| Timeline |
Melia Hotels and Cboe UK Volatility Contrast
Predicted Return Density |
| Returns |
Melia Hotels
Pair trading matchups for Melia Hotels
Cboe UK Consumer
Pair trading matchups for Cboe UK
Pair Trading with Melia Hotels and Cboe UK
The main advantage of trading using opposite Melia Hotels and Cboe UK positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melia Hotels position performs unexpectedly, Cboe UK 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 Cboe UK will offset losses from the drop in Cboe UK's long position.| Melia Hotels vs. Catalyst Media Group | Melia Hotels vs. CATLIN GROUP | Melia Hotels vs. Magnora ASA | Melia Hotels vs. RTW Venture Fund |
| Cboe UK vs. CAP LEASE AVIATION | Cboe UK vs. Melia Hotels | Cboe UK vs. Park Hotels Resorts | Cboe UK vs. Broadridge Financial Solutions |
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 FinTech Suite module to use AI to screen and filter profitable investment opportunities.
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