Correlation Between Melia Hotels and Mitchells Butlers
Can any of the company-specific risk be diversified away by investing in both Melia Hotels and Mitchells Butlers 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 Mitchells Butlers into the same portfolio, which is an essential part of the fundamental portfolio management process.
By analyzing existing cross correlation between Melia Hotels and Mitchells Butlers PLC, you can compare the effects of market volatilities on Melia Hotels and Mitchells Butlers 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 Mitchells Butlers. Check out your portfolio center. Please also check ongoing floating volatility patterns of Melia Hotels and Mitchells Butlers.
Diversification Opportunities for Melia Hotels and Mitchells Butlers
-0.08 | Correlation Coefficient |
Good diversification
The 3 months correlation between Melia and Mitchells is -0.08. Overlapping area represents the amount of risk that can be diversified away by holding Melia Hotels and Mitchells Butlers PLC in the same portfolio, assuming nothing else is changed. The correlation between historical prices or returns on Mitchells Butlers PLC 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 Mitchells Butlers. Values of the correlation coefficient range from -1 to +1, where. The correlation of zero (0) is possible when the price movement of Mitchells Butlers PLC has no effect on the direction of Melia Hotels i.e., Melia Hotels and Mitchells Butlers go up and down completely randomly.
Pair Corralation between Melia Hotels and Mitchells Butlers
Assuming the 90 days trading horizon Melia Hotels is expected to generate 0.64 times more return on investment than Mitchells Butlers. However, Melia Hotels is 1.57 times less risky than Mitchells Butlers. It trades about -0.05 of its potential returns per unit of risk. Mitchells Butlers PLC is currently generating about -0.1 per unit of risk. If you would invest 729.00 in Melia Hotels on November 4, 2024 and sell it today you would lose (10.00) from holding Melia Hotels or give up 1.37% of portfolio value over 90 days.
| Time Period | 3 Months [change] |
| Direction | Moves Against |
| Strength | Insignificant |
| Accuracy | 100.0% |
| Values | Daily Returns |
Melia Hotels vs. Mitchells Butlers PLC
Performance |
| Timeline |
| Melia Hotels |
| Mitchells Butlers PLC |
Melia Hotels and Mitchells Butlers Volatility Contrast
Predicted Return Density |
| Returns |
Pair Trading with Melia Hotels and Mitchells Butlers
The main advantage of trading using opposite Melia Hotels and Mitchells Butlers positions is that it hedges away some unsystematic risk. Because of two separate transactions, even if Melia Hotels position performs unexpectedly, Mitchells Butlers 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 Mitchells Butlers will offset losses from the drop in Mitchells Butlers' long position.| Melia Hotels vs. National Beverage Corp | Melia Hotels vs. Pentair PLC | Melia Hotels vs. Molson Coors Beverage | Melia Hotels vs. Monster Beverage Corp |
| Mitchells Butlers vs. Polar Capital Technology | Mitchells Butlers vs. Concurrent Technologies Plc | Mitchells Butlers vs. Bankers Investment Trust | Mitchells Butlers vs. Sartorius Stedim Biotech |
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 Price Ceiling Movement module to calculate and plot Price Ceiling Movement for different equity instruments.
Other Complementary Tools
| Share Portfolio Track or share privately all of your investments from the convenience of any device | |
| Risk-Return Analysis View associations between returns expected from investment and the risk you assume | |
| USA ETFs Find actively traded Exchange Traded Funds (ETF) in USA | |
| Companies Directory Evaluate performance of over 100,000 Stocks, Funds, and ETFs against different fundamentals | |
| FinTech Suite Use AI to screen and filter profitable investment opportunities |